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Motivating the optimal procurement and deployment of electric storage as a transmission asset

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  • Brown, David P.
  • Sappington, David E.M.

Abstract

We consider the optimal choice between two means of relieving congestion in an electricity network: (1) traditional expansion of transmission capacity; and (2) storage as a transmission asset (SATA). We do so in an environment where the electric utility has privileged knowledge of both the cost of implementing SATA and the likelihood of local network congestion. The optimal policy differs considerably from policies under active consideration, in part by paying the utility relatively little for implementing SATA. Despite the relatively limited compensation, the utility secures rent from its privileged knowledge, particularly its knowledge of SATA implementation costs.

Suggested Citation

  • Brown, David P. & Sappington, David E.M., 2020. "Motivating the optimal procurement and deployment of electric storage as a transmission asset," Energy Policy, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:enepol:v:138:y:2020:i:c:s0301421519307864
    DOI: 10.1016/j.enpol.2019.111202
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    Cited by:

    1. Arteaga, Juan & Zareipour, Hamidreza & Amjady, Nima, 2021. "Energy Storage as a Service: Optimal sizing for Transmission Congestion Relief," Applied Energy, Elsevier, vol. 298(C).

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    More about this item

    Keywords

    Storage as a transmission asset; Electricity network congestion; Regulation;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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