Stochastic Energy Demand And The Stabilization Value Of Energy Storage
The economic value of energy storage to meet peak electricity demand is analyzed with an emphasis on the role of demand uncertainty. The concept of the stabilization value, which measures that part of the benefit of the storage project which is due solely to the stochastic demand components, is defined. The magnitude of the stabilization value, relative to the overall value of energy storage, is evaluated in terms of a simple model that accounts for the relevant characteristics of the electric power utility's production mix. It is found that neglecting the demand uncertainty can seriously bias the benefit assessment of the storage project as well as the determination of the optimal storage capacity.
|Date of creation:||1993|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (612) 625-1222
Fax: (612) 625-6245
Web page: http://www.apec.umn.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dreze, Jacques H. & Modigliani, Franco, 1972.
"Consumption decisions under uncertainty,"
Journal of Economic Theory,
Elsevier, vol. 5(3), pages 308-335, December.
- Devarajan, Shantayanan & Weiner, Robert J., 1989. "Dynamic policy coordination: Stockpiling for energy security," Journal of Environmental Economics and Management, Elsevier, vol. 16(1), pages 9-22, January.
- Carlton, Dennis W, 1977. "Peak Load Pricing with Stochastic Demand," American Economic Review, American Economic Association, vol. 67(5), pages 1006-10, December.
When requesting a correction, please mention this item's handle: RePEc:ags:umaesp:14267. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.