Search

Begin New Search
Proceed to Checkout

Search Results for All:
(Showing results 1 to 5 of 5)



Welfare Impacts of Electricity Storage and the Implications of Ownership Structure

Ramteen Sioshansi

Year: 2010
Volume: Volume 31
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No2-7
View Abstract

Abstract:
Increases in electricity price volatility have raised interest in electricity storage and its potential arbitrage value. Large utility-scale electricity storage can decrease the value of energy arbitrage by smoothing differences in prices on- and off-peak, however this price-smoothing effect can result in significant external welfare gains by reducing consumer energy costs and generator profits. As such, the incentives of merchant storage operators, consumers, and generators may not be properly aligned to ensure socially-optimal storage use. We examine storage use incentives for these different agent types and show that under most reasonable market structures a combination of merchant and consumer ownership of storage maximizes potential welfare gains from storage use.



The Cost of Displacing Fossil Fuels: Some Evidence from Texas

Peter R. Hartley

Year: 2018
Volume: Volume 39
Number: Number 2
DOI: 10.5547/01956574.39.2.phar
View Abstract

Abstract:
Although technological progress can alter the relative costs of different energy sources, fossil fuels inevitably will be displaced as depletion raises their costs and makes them uncompetitive. They may be displaced sooner if they are taxed to internalize negative externalities. Currently, wind generation or nuclear power, supplemented by bulk electricity storage, are the most feasible alternatives to fossil fuels for electricity generation. The ERCOT ISO in Texas provides a realistic model for examining the costs of replacing fossil fuels by wind generation and storage, and for comparing wind power with generation based on nuclear and storage. ERCOT is relatively isolated from neighboring grids, and wind power was almost a quarter of its total generating capacity at the end of 2016. Using the ERCOT example, we also discuss how the long-run configuration of the electricity supply system affects evolution away from a system dominated by natural gas.



How Does Welfare from Load Shifting Electricity Policy Vary with Market Prices? Evidence from Bulk Storage and Electricity Generation

J. Scott Holladay and Jacob LaRiviere

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.jhol
View Abstract

Abstract:
We model the electricity market to demonstrate that changes in the price of natural gas can cause the market and non-market impacts of bulk electricity storage to move in opposite directions. We provide evidence consistent with the model using a series of reduced form tests on data from 2005-2010. We then simulate installing bulk electricity storage on the US electric grid. We find that lower natural gas prices generally reduce the market gains and non-market costs of storage. However, direct non-market costs are still positive which means that there is no argument for subsidizing storage to mitigate pollution given the current mix of generating technologies; arguments in favor of bulk storage R&D subsidies ride on public good aspects of technology and dynamic investment incentives for intermittent renewables.



Optimal Storage, Investment and Management under Uncertainty: It is Costly to Avoid Outages!

Joachim Geske and Richard Green

Year: 2020
Volume: Volume 41
Number: Number 2
DOI: 10.5547/01956574.41.2.jges
View Abstract

Abstract:
We show how electricity storage is operated optimally when the load net of renewable output is uncertain. We estimate a diurnal Markov-process representation of how Germany's residual load changed from hour to hour and design a simple dynamic stochastic electricity system model with non-intermittent generation technologies and storage. We derive the optimal storage, generator output and capacity levels. If storage capacity replaces some generation capacity, the optimal storage strategy must balance arbitrage (between periods of high and low marginal cost) against precautionary storage to ensure energy is available throughout a long peak in net demand. Solving the model numerically under uncertainty (only the transition probabilities to future loads are known), we compare the results to perfect foresight findings. The latter over-estimate the cost-saving potential of energy storage by 27%, as storage can take up arbitrage opportunities that would not be chosen if there was a need for precautionary storage.



How Sensitive are Optimal Fully Renewable Power Systems to Technology Cost Uncertainty?

Behrang Shirizadeh, Quentin Perrier, and Philippe Quirion

Year: 2022
Volume: Volume 43
Number: Number 1
DOI: 10.5547/01956574.43.1.bshi
View Abstract

Abstract:
Many studies have demonstrated the feasibility of fully renewable power systems. Yet the future costs of key technologies are highly uncertain, and little is known about the robustness of a renewable power system to these uncertainties. To analyze it, we build 315 cost scenarios by varying the costs of key technologies and we model the optimal renewable power system for France, simultaneously optimizing investment and dispatch. We add to the literature by studying a consecutive 18-years weather period; by testing all combinations of technology costs rather than changing them one-at-a-time; and by calculating the regret from optimizing the energy mix on the basis of cost assumptions that do not materialize. Our results indicate that the cost of a 100% system is not that sensitive to uncertainty. Admittedly, the optimal energy mix is highly sensitive to cost assumptions: across our scenarios, the installed capacity in PV, onshore wind and power-to-gas varies by a factor of 5, batteries and offshore wind even more. However, in every scenario the total production and storage cost is similar to, or lower than the current cost. This indicates that renewable technologies will become by and large substitutable. Moreover, even if the energy mix is optimized based on cost assumptions which turn out to be wrong, the extra cost is low: 4% in average and less than 9% in 95% of the scenarios.





Begin New Search
Proceed to Checkout

 

© 2024 International Association for Energy Economics | Privacy Policy | Return Policy