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Shifting demand and supply over time and space to manage intermittent generation: The economics of electrical storage

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  • Newbery, David

Abstract

The literature on electrical energy storage (EES) is technical and complex, which this paper aims to simplify. It quantifies the current scale, costs and value of different types of mature EES and compares them to peaking generators, interconnectors and demand-side response. Worldwide, dams have 2700 times the storage capacity of pumped storage, which accounts for 99% of conventional EES, batteries making up most of the rest. Indirect use of hydro power, and in future, electric vehicles, adds to their value and if accessible at reasonable cost, would be cheaper than conventional EES. EES, peakers and DC interconnectors can offer flexibility services which considerably enhance their value, but hopes of a battery revolution enabling a smarter electricity system should not be exaggerated.

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  • Newbery, David, 2018. "Shifting demand and supply over time and space to manage intermittent generation: The economics of electrical storage," Energy Policy, Elsevier, vol. 113(C), pages 711-720.
    • Handle: RePEc:eee:enepol:v:113:y:2018:i:c:p:711-720
    DOI: 10.1016/j.enpol.2017.11.044
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    14. Hunt, Julian David & Zakeri, Behnam & Lopes, Rafael & Barbosa, Paulo Sérgio Franco & Nascimento, Andreas & Castro, Nivalde José de & Brandão, Roberto & Schneider, Paulo Smith & Wada, Yoshihide, 2020. "Existing and new arrangements of pumped-hydro storage plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 129(C).
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    18. Petr Spodniak, Valentin Bertsch, and Mel Devine, 2021. "The Profitability of Energy Storage in European Electricity Markets," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    19. Edens, Marga G. & Lavrijssen, Saskia A.C.M., 2019. "Balancing public values during the energy transition – How can German and Dutch DSOs safeguard sustainability?," Energy Policy, Elsevier, vol. 128(C), pages 57-65.
    20. Newbery, David, 2023. "Wind, water and wires: Evaluating joint wind and interconnector capacity expansions in hydro-rich regions," Energy Economics, Elsevier, vol. 117(C).
    21. Tor Håkon Jackson Inderberg, 2020. "Centrally Decentralising? Analysing Key Policies and Pathways in Norway’s Electricity Transitions," Politics and Governance, Cogitatio Press, vol. 8(3), pages 173-184.
    22. Xiong, Heng & Mamon, Rogemar, 2019. "A higher-order Markov chain-modulated model for electricity spot-price dynamics," Applied Energy, Elsevier, vol. 233, pages 495-515.
    23. Topalović, Zejneba & Haas, Reinhard & Ajanović, Amela & Hiesl, Albert, 2022. "Economics of electric energy storage. The case of Western Balkans," Energy, Elsevier, vol. 238(PA).
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