Technoeconomic assessment of an Allam-cycle-based oxygen storage system under market-driven operation

Abstract

This work presents a technoeconomic assessment of an Allam cycle–based energy storage system, evaluated under Spanish electricity market conditions, where oxygen is produced, stored, and later used to decouple power generation from air separation. The analysis compares two configurations, a conventional Allam cycle and an Allam-storage system, benchmarked against a reference Natural Gas Combined Cycle (NGCC). Three natural gas (NG) price scenarios representative of recent Spanish market conditions were examined, and two capital expenditure (CAPEX) levels were considered through a Monte Carlo–based uncertainty analysis. The Allam-storage configuration operates under a peak–off-peak strategy, purchasing low-price electricity for oxygen production and selling power during high-price periods.Across all scenarios, integrating storage consistently improved performance, reducing the Levelized Cost of Electricity (LCOE) by up to 12.9% and increasing the Profitability Index (PI) by up to 12.6%. Compared with the NGCC including carbon taxes (65.29 €/tCO2), both Allam-based systems achieved better technoeconomic performance despite 47–77% higher CAPEX, with PI improvements of up to 58%. Optimal storage capacities ranged between 17 and 22 h depending on fuel price. Although still unprofitable under current market conditions, the inclusion of oxygen storage enhances technoeconomic performance and market adaptability, enabling the Allam cycle to exploit price volatility and could contribute effectively to future high-renewable power systems.