IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v73y2021ics0957178721001466.html

The status of and opportunities for utility-scale battery storage in Australia: A regulatory and market perspective

Author

Listed:
  • Csereklyei, Zsuzsanna
  • Kallies, Anne
  • Diaz Valdivia, Andres

Abstract

Australia's electricity market is rapidly adding renewable energy generation. Utility-scale batteries could have a major role in facilitating these transitions; however, their deployment is still largely state-subsidized. We summarize the current and future roles for batteries from a legal-economic perspective in the context of Australia's electricity market framework. We find that the future of batteries in Australia is not only a function of the large-scale deployment of renewables, their cost development and the comparative future cost of competing gas turbines but also of national electricity market and state policy reforms focusing on reliability.

Suggested Citation

  • Csereklyei, Zsuzsanna & Kallies, Anne & Diaz Valdivia, Andres, 2021. "The status of and opportunities for utility-scale battery storage in Australia: A regulatory and market perspective," Utilities Policy, Elsevier, vol. 73(C).
  • Handle: RePEc:eee:juipol:v:73:y:2021:i:c:s0957178721001466
    DOI: 10.1016/j.jup.2021.101313
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178721001466
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jup.2021.101313?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Francisco Castellano Ruz & Michael G. Pollitt, 2016. "Overcoming Barriers to Electrical Energy Storage," Competition and Regulation in Network Industries, , vol. 17(2), pages 123-149, June.
    2. Anuta, Oghenetejiri Harold & Taylor, Phil & Jones, Darren & McEntee, Tony & Wade, Neal, 2014. "An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 489-508.
    3. repec:aen:journl:ej39-si1-giulietti is not listed on IDEAS
    4. repec:aen:journl:dn-se-a03 is not listed on IDEAS
    5. repec:aen:journl:2011v32-02-a01 is not listed on IDEAS
    6. Francisco Castellano & Michael G. Pollitt, 2016. "Overcoming barriers to electrical energy storage: Comparing California and Europe," Cambridge Working Papers in Economics 1629, Faculty of Economics, University of Cambridge.
    7. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    8. Paul L Joskow, 2019. "Challenges for wholesale electricity markets with intermittent renewable generation at scale: the US experience," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(2), pages 291-331.
    9. repec:aen:journl:ej40-4-sioshansi is not listed on IDEAS
    10. Schill, Wolf-Peter & Kemfert, Claudia, 2011. "Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(3), pages 59-87.
    11. Carlsson, Fredrik & Martinsson, Peter & Akay, Alpaslan, 2011. "The effect of power outages and cheap talk on willingness to pay to reduce outages," Energy Economics, Elsevier, vol. 33(5), pages 790-798, September.
    12. repec:aen:journl:32-3-a03 is not listed on IDEAS
    13. Malcolm Abbott, 2006. "The Performance Of An Electricity Utility: The Case Of The State Electricity Commission Of Victoria, 1925–93," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 46(1), pages 23-44, March.
    14. Sakti, Apurba & Botterud, Audun & O’Sullivan, Francis, 2018. "Review of wholesale markets and regulations for advanced energy storage services in the United States: Current status and path forward," Energy Policy, Elsevier, vol. 120(C), pages 569-579.
    15. McConnell, Dylan & Forcey, Tim & Sandiford, Mike, 2015. "Estimating the value of electricity storage in an energy-only wholesale market," Applied Energy, Elsevier, vol. 159(C), pages 422-432.
    16. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    17. Winfield, Mark & Shokrzadeh, Shahab & Jones, Adam, 2018. "Energy policy regime change and advanced energy storage: A comparative analysis," Energy Policy, Elsevier, vol. 115(C), pages 572-583.
    18. repec:aen:journl:ej40-3-astier is not listed on IDEAS
    19. de Nooij, Michiel & Koopmans, Carl & Bijvoet, Carlijn, 2007. "The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks," Energy Economics, Elsevier, vol. 29(2), pages 277-295, March.
    20. repec:aen:journl:2010v31-02-a07 is not listed on IDEAS
    21. Carlsson, Fredrik & Martinsson, Peter, 2008. "Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages," Energy Economics, Elsevier, vol. 30(3), pages 1232-1245, May.
    22. Bradbury, Kyle & Pratson, Lincoln & Patiño-Echeverri, Dalia, 2014. "Economic viability of energy storage systems based on price arbitrage potential in real-time U.S. electricity markets," Applied Energy, Elsevier, vol. 114(C), pages 512-519.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oprea, Simona-Vasilica & Bâra, Adela, 2025. "Economics of utility-scale batteries in Romania under various market conditions," Utilities Policy, Elsevier, vol. 95(C).
    2. Muthe Mathias Mwampashi & Christina Sklibosios Nikitopoulos, 2026. "Beyond the Mean: Examining Electricity Spot Price Distribution in Australia," The Energy Journal, , vol. 47(2), pages 209-254, March.
    3. Mwampashi, Muthe Mathias & Nikitopoulos, Christina Sklibosios & Rai, Alan, 2024. "From 30- to 5-minute settlement rule in the NEM: An early evaluation," Energy Policy, Elsevier, vol. 194(C).
    4. Coriolano Salvini & Ambra Giovannelli, 2022. "Techno-Economic Comparison of Utility-Scale Compressed Air and Electro-Chemical Storage Systems," Energies, MDPI, vol. 15(18), pages 1-16, September.
    5. Csereklyei, Zsuzsanna & Kallies, Anne, 2022. "A legal-economic framework of electricity markets: Assessing Australia’s transition," MPRA Paper 114191, University Library of Munich, Germany.
    6. Csereklyei, Zsuzsanna & Khezr, Peyman, 2024. "How do changes in settlement periods affect wholesale market prices? Evidence from Australia's National Electricity Market," Energy Economics, Elsevier, vol. 132(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Loisel, Rodica & Simon, Corentin, 2021. "Market strategies for large-scale energy storage: Vertical integration versus stand-alone player," Energy Policy, Elsevier, vol. 151(C).
    2. Ahmed Gailani & Tracey Crosbie & Maher Al-Greer & Michael Short & Nashwan Dawood, 2020. "On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers," Energies, MDPI, vol. 13(5), pages 1-20, March.
    3. Chen, Yang & Odukomaiya, Adewale & Kassaee, Saiid & O’Connor, Patrick & Momen, Ayyoub M. & Liu, Xiaobing & Smith, Brennan T., 2019. "Preliminary analysis of market potential for a hydropneumatic ground-level integrated diverse energy storage system," Applied Energy, Elsevier, vol. 242(C), pages 1237-1247.
    4. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    5. Woo, C.K. & Ho, T. & Shiu, A. & Cheng, Y.S. & Horowitz, I. & Wang, J., 2014. "Residential outage cost estimation: Hong Kong," Energy Policy, Elsevier, vol. 72(C), pages 204-210.
    6. Jin, Taeyoung & Lee, Tae Eui & Kim, Dowon, 2023. "Value of lost load estimation for the South Korea's manufacturing sector—finding the gap between the supply and demand side," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    7. Karim L. Anaya & Michael G. Pollitt, 2018. "Storage Business Models: Lessons for Electricity from Natural Gas, Cloud Data and Frozen Food," Working Papers EPRG 1804, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Shan, Rui & Abdulla, Ahmed & Li, Mingquan, 2021. "Deleterious effects of strategic, profit-seeking energy storage operation on electric power system costs," Applied Energy, Elsevier, vol. 292(C).
    9. Khan, Agha Salman M. & Verzijlbergh, Remco A. & Sakinci, Ozgur Can & De Vries, Laurens J., 2018. "How do demand response and electrical energy storage affect (the need for) a capacity market?," Applied Energy, Elsevier, vol. 214(C), pages 39-62.
    10. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    11. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.
    12. Lin, Boqiang & Wu, Wei, 2017. "Economic viability of battery energy storage and grid strategy: A special case of China electricity market," Energy, Elsevier, vol. 124(C), pages 423-434.
    13. Blanco, Herib & Faaij, André, 2018. "A review at the role of storage in energy systems with a focus on Power to Gas and long-term storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1049-1086.
    14. Mercier, Thomas & Olivier, Mathieu & De Jaeger, Emmanuel, 2023. "The value of electricity storage arbitrage on day-ahead markets across Europe," Energy Economics, Elsevier, vol. 123(C).
    15. Mubashir Qasim & Koji Kotani, 2014. "An empirical analysis of energy shortage in Pakistan," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(1), pages 137-166, June.
    16. Karim L. Anaya & Michael G. Pollitt, 2019. "Storage Business Models: Lessons for Electricity from Cloud Data, Frozen Food and Natural Gas," The Energy Journal, , vol. 40(1_suppl), pages 409-432, June.
    17. Motz, Alessandra, 2021. "Security of supply and the energy transition: The households' perspective investigated through a discrete choice model with latent classes," Energy Economics, Elsevier, vol. 97(C).
    18. Csereklyei, Zsuzsanna & Kallies, Anne, 2022. "A legal-economic framework of electricity markets: Assessing Australia’s transition," MPRA Paper 114191, University Library of Munich, Germany.
    19. Csereklyei, Zsuzsanna & Qu, Songze & Ancev, Tihomir, 2021. "Are electricity system outages and the generation mix related? Evidence from NSW, Australia," Energy Economics, Elsevier, vol. 99(C).
    20. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:73:y:2021:i:c:s0957178721001466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.