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The economic value of storage in renewable power systems - the case of thermal energy storage in concentrating solar plants


  • Nagl, Stephan

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Fürsch, Michaela

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Jägemann, Cosima

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Bettzüge, Marc Oliver

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)


In this article we analyze the value of thermal energy storages in concentrated solar plants depending on the electricity generation mix. To determine the value from a system integrated view we model the whole electricty generation market of the Iberian Peninsula. Key findings for thermal energy storage units in concentrated solar plants include an increasing value in electricity systems with higher shares of fluctuating renewable generation and a potentially significant role in a transformation to a primarily renewable based electricity system. Due to the relatively high investment costs concentrated solar power plants with or without thermal energy storages are not cost efficient in todays electricity markets. However, expected cost reductions due to learning curve effects and higher fluctuating renewable generation may lead to a comparative cost advantage of concentrated solar power plants with thermal energy storages compared to other renewable technologies.

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  • Nagl, Stephan & Fürsch, Michaela & Jägemann, Cosima & Bettzüge, Marc Oliver, 2011. "The economic value of storage in renewable power systems - the case of thermal energy storage in concentrating solar plants," EWI Working Papers 2011-8, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
  • Handle: RePEc:ris:ewikln:2011_008

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    References listed on IDEAS

    1. Fthenakis, Vasilis & Mason, James E. & Zweibel, Ken, 2009. "The technical, geographical, and economic feasibility for solar energy to supply the energy needs of the US," Energy Policy, Elsevier, vol. 37(2), pages 387-399, February.
    2. Graves, Frank & Jenkin, Thomas & Murphy, Dean, 1999. "Opportunities for Electricity Storage in Deregulating Markets," The Electricity Journal, Elsevier, vol. 12(8), pages 46-56, October.
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    4. Poullikkas, Andreas & Hadjipaschalis, Ioannis & Kourtis, George, 2010. "The cost of integration of parabolic trough CSP plants in isolated Mediterranean power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(5), pages 1469-1476, June.
    5. Richter, Jan, 2011. "DIMENSION - A Dispatch and Investment Model for European Electricity Markets," EWI Working Papers 2011-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    6. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas & Weiss, Jurgen, 2009. "Estimating the value of electricity storage in PJM: Arbitrage and some welfare effects," Energy Economics, Elsevier, vol. 31(2), pages 269-277, March.
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    Cited by:

    1. Andreas Schröder & Friedrich Kunz & Jan Meiss & Roman Mendelevitch & Christian von Hirschhausen, 2013. "Current and Prospective Costs of Electricity Generation until 2050," Data Documentation 68, DIW Berlin, German Institute for Economic Research.
    2. Brand, Bernhard & Boudghene Stambouli, Amine & Zejli, Driss, 2012. "The value of dispatchability of CSP plants in the electricity systems of Morocco and Algeria," Energy Policy, Elsevier, vol. 47(C), pages 321-331.
    3. Bertsch, Joachim & Growitsch, Christian & Lorenczik, Stefan & Nagl, Stephan, 2016. "Flexibility in Europe's power sector — An additional requirement or an automatic complement?," Energy Economics, Elsevier, vol. 53(C), pages 118-131.
    4. Fürsch, Michaela & Hagspiel, Simeon & Jägemann, Cosima & Nagl, Stephan & Lindenberger, Dietmar & Tröster, Eckehard, 2013. "The role of grid extensions in a cost-efficient transformation of the European electricity system until 2050," Applied Energy, Elsevier, vol. 104(C), pages 642-652.
    5. Hirth, Lion & Ueckerdt, Falko & Edenhofer, Ottmar, 2014. "Why Wind Is Not Coal: On the Economics of Electricity," Energy: Resources and Markets 172433, Fondazione Eni Enrico Mattei (FEEM).
    6. Jägemann, Cosima & Fürsch, Michaela & Hagspiel, Simeon & Nagl, Stephan, 2013. "Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways," Energy Economics, Elsevier, vol. 40(C), pages 622-636.
    7. Lion Hirth, 2015. "The Optimal Share of Variable Renewables: How the Variability of Wind and Solar Power affects their Welfare-optimal Deployment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    8. Sadati, S.M. Sajed & Qureshi, Fassahat Ullah & Baker, Derek, 2015. "Energetic and economic performance analyses of photovoltaic, parabolic trough collector and wind energy systems for Multan, Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 844-855.
    9. Jägemann, Cosima, 2014. "A note on the inefficiency of technology- and region-specific renewable energy support - The German case," EWI Working Papers 2014-5, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    10. Jägemann, Cosima, 2012. "Decarbonizing Europe’s power sector by 2050 - Analyzing the implications of alternative decarbonization pathways," EWI Working Papers 2012-13, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    11. Fürsch, Michaela & Nagl, Stephan & Lindenberger, Dietmar, 2012. "Optimization of power plant investments under uncertain renewable energy development paths - A multistage stochastic programming approach," EWI Working Papers 2012-8, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    12. Shcherbakova, Anastasia & Kleit, Andrew & Cho, Joohyun, 2014. "The value of energy storage in South Korea’s electricity market: A Hotelling approach," Applied Energy, Elsevier, vol. 125(C), pages 93-102.
    13. Kost, Christoph & Flath, Christoph M. & Möst, Dominik, 2013. "Concentrating solar power plant investment and operation decisions under different price and support mechanisms," Energy Policy, Elsevier, vol. 61(C), pages 238-248.
    14. Jägemann, Cosima & Hagspiel, Simeon & Lindenberger, Dietmar, 2013. "The Economic Inefficiency of Grid Parity: The Case of German Photovoltaics," EWI Working Papers 2013-19, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).

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    More about this item


    Fluctuating renewables; value of storage; concentrated solar power; power plant optimization;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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