Dynamic energy, exergy and market modeling of a High Temperature Heat and Power Storage System A. Arabkoohsar * , G.B. Andresen Department of Engineering, Aarhus University, 8000 Aarhus, Denmark article info Article history: Received 29 November 2016 Received in revised form 3 March 2017 Accepted 15 March 2017 Keywords: Smart energy Dynamic modeling Energy storage District heating Wind energy Energy market abstract A novel energy storage system that produces both electricity and heat at high efficiencies and takes advantage of a high temperature hot rock cavern thermal energy storage was recently introduced and designed. This study aims at evaluating the performance of the system in terms of energy and exergy efficiencies under realistic operational conditions where the storage supports a number of wind turbines over a long period. The potential value creation of the energy storage system in the local electricity and heat markets is also assessed. The Western part of Denmark with its high number of wind turbine plants and flexible electricity and heat markets have been chosen for the case study of this work. Having both forecasted and realized wind power generation as well as energy prices for the recent years, the system is designed with rigor and a smart bid strategy for the power plant equipped with the energy storage unit for day-ahead and intra-day markets is determined. The results show that the system is able to compensate the fluctuations of wind power plants, and present high annual overall energy and elec- tricity efficiencies of 80.2% and 31.4% and exergy efficiency of 56.1%. © 2017 Elsevier Ltd. All rights reserved. 1. Introduction The wind-solar-biomass mix in the electricity and heat sectors is a corner stone in the planned Danish transition to CO2 neutral energy production by 2035 [1]. However, serious problems must be addressed for the mix to be successful. Some of these are the topic of the recent report “Smart Energy - hovedrapport” by the Danish TSO (Transmission System Operator) Energinet.dk. Here, special attention is brought to flexible demand and the large and costly need for peak production units for the relatively few hours where wind and solar generations are low while the demand remains high. As a consequence, it is estimated that the total socio- economical value of flexible electricity demand in Denmark will increase from current (low) values to about 100 million Euro per year by 2035. The report points out that increased coupling be- tween the energy sectors, i.e. the smart energy concept [2], is the most cost effective instrument to realize the required flexibility. To this end, several well-understood technologies are explored. Most noticeably these include heat pumps, electric boilers and electrical vehicles. In the present paper, a new innovative utility scale energy conversion and production technology that directly addresses the shortcomings of the current smart energy technologies mentioned above is studied. To this end, the relevant case of an integrated electricity and heating system of Aarhus city embedded in the electricity grid of Western Denmark has been selected. The new technology is a HTHPSS (High Temperature Heat and Power Storage System) that have been designed specifically to accommodate the increased amounts of variable power generation from VRES (Vari- able Renewable Energy Sources). The defining features of the storage solution is a very high energy efficiency, low-cost for large- scale installations, environmental friendliness, and the ability to support both power and district heating grids at time scales ranging from sub-seconds (primary reserve) to several days, thus allowing e.g. energy trading, forecast error hedging and peak load support. In addition, it does not require special geological features such as those pumped hydro and CAES (compressed air energy storage) do. The study presented here, includes a dynamic market simulation that allows realistic energy and exergy efficiencies as well as elec- tricity and heat market values to be assessed. The novelty of the paper lies in the detailed assessment of the new smart energy technology HTHPSS that addresses the typical shortcomings of previously explored technologies, in particular, the need of economically attractive up-wards reserve capacity in the * Corresponding author. E-mail address: mani.koohsar@yahoo.com (A. Arabkoohsar). Contents lists available at ScienceDirect Energy journal homepage: www.elsevier.com/locate/energy http://dx.doi.org/10.1016/j.energy.2017.03.065 0360-5442/© 2017 Elsevier Ltd. All rights reserved. Energy 126 (2017) 430e443