The value of energy storage in decarbonizing the electricity sector

Abstract

Electrical energy storage could play an important role in decarbonizing the electricity sector by offering a new, carbon-free source of operational flexibility, improving the utilization of generation assets, and facilitating the integration of variable renewable energy sources. Yet, the future cost of energy storage technologies is uncertain, and the value that they can bring to the system depends on multiple factors. Moreover, the marginal value of storage diminishes as more energy storage capacity is deployed. To explore the potential value of energy storage in deep decarbonization of the electricity sector, we assess the impact of increasing levels of energy storage capacity on both power system operations and investments in generation capacity using a generation capacity expansion model with detailed unit commitment constraints. In a case study of a system with load and renewable resource characteristics from the U.S. state of Texas, we find that energy storage delivers value by increasing the cost-effective penetration of renewable energy, reducing total investments in nuclear power and gas-fired peaking units, and improving the utilization of all installed capacity. However, we find that the value delivered by energy storage with a 2-hour storage capacity only exceeds current technology costs under strict emissions limits, implying that substantial cost reductions in battery storage are needed to justify large-scale deployment. In contrast, storage resources with a 10-hour storage capacity deliver value consistent with the current cost of pumped hydroelectric storage. In general, while energy storage appears essential to enable decarbonization strategies dependent on very high shares of wind and solar energy, storage is not a requisite if a diverse mix of flexible, low-carbon power sources is employed, including flexible nuclear power.

Energy storage deployment and innovation for the clean energy transition

“…This finding contrasts with recent studies, postulating the value of energy storage for decarbonizing electricity to be low, given high costs of storage technologies 29,30 . According to our forecasts, both studies forecast pessimistic future prices for energy storage that do not consider the complementary effects of innovation and deployment and the value of flexibility for power and/or energy dense storage options in future power systems.…”

Optimal Carbon Taxes for Emissions Targets in the Electricity Sector

“…At a target GHG reduction of 5%, the congestion surplus is increased by 9.5%; at a 10% target the surplus is increased by 16 Congestion surplus as a share of total cost remains relatively constant, however: 20.6% in the zero-tax case, 20.4% in the 5% target case, and 19.6% in the 10% target case. In addition to higher average LMPs, there is also an increase in the variability of LMPs, which improves the value proposition for grid-scale energy storage devices, consistent with findings in [46]. At a 5% emissions reduction target, the average LMP for each bus is 35-60% higher (average of 46%), while the standard deviation of LMPs for each bus is 101-113% higher.…”

Carbon dioxide emissions effects of grid-scale electricity storage in a decarbonizing power system

“…In order to avert severe impacts of climate change on humans and natural systems, carbon dioxide (CO 2 ) emissions from the electric power sector must rapidly decrease (Fri et al 2010). Grid-scale electricity storage (hereafter 'storage') could be a key technology for decarbonizing the electric power system (Mileva et al 2016, Sisternes et al 2016, Denholm and Hand 2011, Deep Decarbonization Pathways Project 2015. At high penetrations of wind and solar, storage can reduce wind and solar curtailment by shifting generated electricity across time to meet demand (Mileva et al 2016).…”