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A Rough Analysis: Valuing Gas Storage

Monica Giulietti, Luigi Grossi, and Michael Waterson

Year: 2012
Volume: Volume 33
Number: Number 4
DOI: 10.5547/01956574.33.4.6
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Abstract:
This paper studies the impact of a fire in 2006 which removed the possibility of access to the Rough gas storage facilities covering over 80% of total UK storage, at a time when major withdrawals from storage would have likely taken place. Implicitly, it shows the value of such gas storage facilities, in a country with relatively little storage, where we might therefore see a considerable impact. We find that the major effect on activity was through an increased sensitivity of supply to prices and an increased variance in this sensitivity, not through non-price rationing. Keywords: Gas storage, Rough fire, UK gas market, Event study analysis http://dx.doi.org/10.5547/01956574.33.4.6



Analyzing the Potential Economic Value of Energy Storage

Monica Giulietti, Luigi Grossi, Elisa Trujillo Baute, and Michael Waterson

Year: 2018
Volume: Volume 39
Number: Special Issue 1
DOI: 10.5547/01956574.39.SI1.mgiu
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Abstract:
This paper examines the commercial opportunities for electrical energy storage, taking market prices as given and determining the extent to which a strategy of arbitrage across the day, buying at the lowest price times at night and selling at the highest price times during the early evening, and relying on price forecasts one day-ahead generates profits in the British context. The paper sets out the potential problems as the market moves to absorb increasing amounts of wind, then characterises the nature of prices, which reveals the importance of a strategy in which power is absorbed into store for a relatively few hours of the day and discharged over a relatively few hours. It argues that additional incentives may need to be put into place in order to render storage over relatively longer periods more attractive and to deliver broader social benefits which are unlikely to be generated and captured as a result of purely commercial considerations.





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