Profitability analysis and sizing-arbitrage optimisation of retrofitting coal-fired power plants for grid-side energy storage

In the context of global decarbonisation, retrofitting existing coal-fired power plants (CFPPs) is an essential pathway to achieving sustainable transition of power systems. This paper explores the potential of using electric heaters and thermal energy storage based on molten salt heat transfer fluids to retrofit CFPPs for grid-side energy storage systems (ESSs), along with an investigation of the energy arbitrage profitability. Sizing and scheduling co-optimisation of CFPP-retrofitted ESSs is formulated as a bi-level framework, in which the upper-level sizing model aims to achieve the maximum net present value (NPV) and the lower-level scheduling model maximises the annual arbitrage profit. The co-optimisation problem is solved by the teaching-learning-based optimisation algorithm coupled with the mixed integer linear programming optimiser. Furthermore, the initial state of charge (SOC) factor is innovatively considered as a decision variable in the scheduling optimisation, which is co-optimised with the charging/discharging power of ESSs. Taking a CFPP with the realistic annual electricity tariff profile in Zhejiang Province, China from 12/2022 to 11/2023 as a case study (annual average peak-valley tariff gap of 132 USD/MWh and peak duration of 6/8 h), the results show that the CFPP-retrofitted ESS is profitable via energy arbitrage. The initial SOC factor is found to have a significant impact on the profitability of the CFPP retrofitting scheme, and the optimal value (24 %) enables the full operational cycle of energy arbitrage and increases the NPV by 16 % compared to the default value (50 %). The levelised cost of storage of the CFPP-retrofitted ESS is also evaluated and compared with those of Li-ion and Lead-acid batteries, with results indicating that the CFPP-retrofitted ESS is more cost-effective than batteries in energy arbitrage applications. Finally, sensitivity analyses of electricity tariff profiles are conducted to explore the profitability with different conditions, and the results reveal that the CFPP retrofitting scheme is only profitable with the average peak tariff higher than 182.0 USD/MWh and a 40 % increase in the peak tariff leads to a 390 % increase in the NPV, highlighting the decisive role of the electricity tariff on the profitability. Overall, the findings from this paper can provide comprehensive references for the sustainable and cost-effective retrofit of CFPPs.