IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v189y2024ics030142152400154x.html
   My bibliography  Save this article

Battery electricity storage as both a complement and substitute for cross-border interconnection

Author

Listed:
  • Biancardi, Andrea
  • Mendes, Carla
  • Staffell, Iain

Abstract

Cross-border interconnectors play a critical role in fulfilling the growing demand for cleaner and more affordable electricity. They are integral to completing the single energy market in Europe, so the European Union has set ambitious targets for the coming decade. Many challenges affect and delay the development of transmission infrastructure, and the deployment of non-wires alternatives such as battery energy storage systems may threaten the financial viability of these investments. We evaluate the potential impact of storage deployment on the profitability of cross-border interconnectors using the European electricity market model “EuroMod”. We find that higher battery penetration than projected in ENTSOE's TYNDP in 2030 significantly reduces transmission surplus (by €267 m to €506 m) under different battery uptake scenarios. To maintain the expected total surplus as projected by TYNDP in 2030, the continent-wide transmission capacity must decrease by 4.1–7.0%, potentially superseding 19–33% of planned transmission capacity expansions to 2030. Although cross-border interconnectors are of strategic importance for energy security and flexibility, the results highlight the pressing need for regulators, policymakers, and private investors to account for the rapid uptake of storage and integrate both storage and interconnectors in system planning.

Suggested Citation

  • Biancardi, Andrea & Mendes, Carla & Staffell, Iain, 2024. "Battery electricity storage as both a complement and substitute for cross-border interconnection," Energy Policy, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:enepol:v:189:y:2024:i:c:s030142152400154x
    DOI: 10.1016/j.enpol.2024.114134
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142152400154X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2024.114134?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Joskow & Jean Tirole, 2005. "Merchant Transmission Investment," Journal of Industrial Economics, Wiley Blackwell, vol. 53(2), pages 233-264, June.
    2. Mendes, Carla & Staffell, Iain & Green, Richard, 2024. "EuroMod: Modelling European power markets with improved price granularity," Energy Economics, Elsevier, vol. 131(C).
    3. Child, Michael & Kemfert, Claudia & Bogdanov, Dmitrii & Breyer, Christian, 2019. "Flexible electricity generation, grid exchange and storage for the transition to a 100% renewable energy system in Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 139, pages 80-101.
    4. Mehigan, L. & Ó Gallachóir, Brian & Deane, Paul, 2022. "Batteries and interconnection: Competing or complementary roles in the decarbonisation of the European power system?," Renewable Energy, Elsevier, vol. 196(C), pages 1229-1240.
    5. Pfenninger, Stefan & Hirth, Lion & Schlecht, Ingmar & Schmid, Eva & Wiese, Frauke & Brown, Tom & Davis, Chris & Gidden, Matthew & Heinrichs, Heidi & Heuberger, Clara & Hilpert, Simon & Krien, Uwe & Ma, 2018. "Opening the black box of energy modelling: Strategies and lessons learned," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19, pages 63-71.
    6. Hirth, Lion & Ueckerdt, Falko & Edenhofer, Ottmar, 2015. "Integration costs revisited – An economic framework for wind and solar variability," Renewable Energy, Elsevier, vol. 74(C), pages 925-939.
    7. Christian M. Grams & Remo Beerli & Stefan Pfenninger & Iain Staffell & Heini Wernli, 2017. "Balancing Europe’s wind-power output through spatial deployment informed by weather regimes," Nature Climate Change, Nature, vol. 7(8), pages 557-562, August.
    8. Ward, K.R. & Green, R. & Staffell, I., 2019. "Getting prices right in structural electricity market models," Energy Policy, Elsevier, vol. 129(C), pages 1190-1206.
    9. O. Schmidt & A. Hawkes & A. Gambhir & I. Staffell, 2017. "The future cost of electrical energy storage based on experience rates," Nature Energy, Nature, vol. 2(8), pages 1-8, August.
    10. Bruce Mountain and Jamie Carstairs, 2018. "Batteries, Interconnectors and Institutions: The Case of South Australia," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    11. Kevin Marnell & Manasseh Obi & Robert Bass, 2019. "Transmission-Scale Battery Energy Storage Systems: A Systematic Literature Review," Energies, MDPI, vol. 12(23), pages 1-31, December.
    12. Neetzow, Paul & Pechan, Anna & Eisenack, Klaus, 2018. "Electricity storage and transmission: Complements or substitutes?," Energy Economics, Elsevier, vol. 76(C), pages 367-377.
    13. Westphal, Kirsten & Pastukhova, Maria & Pepe, Jacopo Maria, 2022. "Geopolitics of electricity: Grids, space and (political) power," SWP Research Papers 6/2022, Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs.
    14. Rinaldi, Arthur & Yilmaz, Selin & Patel, Martin K. & Parra, David, 2022. "What adds more flexibility? An energy system analysis of storage, demand-side response, heating electrification, and distribution reinforcement," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    15. Biancardi, Andrea & Di Castelnuovo, Matteo & Staffell, Iain, 2021. "A framework to evaluate how European Transmission System Operators approach innovation," Energy Policy, Elsevier, vol. 158(C).
    16. Knezović, Katarina & Marinakis, Adamantios & Evrenosoglu, C.Yaman & Oudalov, Alexandre, 2021. "Role of grid and bulk storage in the integration of variable renewable energy resources: Framework for optimal operation-driven multi-period infrastructure planning," Energy, Elsevier, vol. 226(C).
    17. Golombek, Rolf & Lind, Arne & Ringkjøb, Hans-Kristian & Seljom, Pernille, 2022. "The role of transmission and energy storage in European decarbonization towards 2050," Energy, Elsevier, vol. 239(PC).
    18. Poudineh, Rahmatallah & Jamasb, Tooraj, 2014. "Distributed generation, storage, demand response and energy efficiency as alternatives to grid capacity enhancement," Energy Policy, Elsevier, vol. 67(C), pages 222-231.
    19. Rubino, Alessandro & Cuomo, Michael, 2015. "A regulatory assessment of the Electricity Merchant Transmission Investment in EU," Energy Policy, Elsevier, vol. 85(C), pages 464-474.
    20. Fodstad, Marte & Crespo del Granado, Pedro & Hellemo, Lars & Knudsen, Brage Rugstad & Pisciella, Paolo & Silvast, Antti & Bordin, Chiara & Schmidt, Sarah & Straus, Julian, 2022. "Next frontiers in energy system modelling: A review on challenges and the state of the art," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    21. Sidhu, Arjan S. & Pollitt, Michael G. & Anaya, Karim L., 2018. "A social cost benefit analysis of grid-scale electrical energy storage projects: A case study," Applied Energy, Elsevier, vol. 212(C), pages 881-894.
    22. Leonardo Meeus, 2020. "The Evolution of Electricity Markets in Europe," Books, Edward Elgar Publishing, number 19187.
    23. Joos, Michael & Staffell, Iain, 2018. "Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 86(C), pages 45-65.
    Full references (including those not matched with items on IDEAS)

    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. Maximilian Parzen & Fabian Neumann & Addrian H. Van Der Weijde & Daniel Friedrich & Aristides Kiprakis, 2021. "Beyond cost reduction: Improving the value of energy storage in electricity systems," Papers 2101.10092, arXiv.org, revised Jul 2022.
    2. Biancardi, Andrea & Di Castelnuovo, Matteo & Staffell, Iain, 2021. "A framework to evaluate how European Transmission System Operators approach innovation," Energy Policy, Elsevier, vol. 158(C).
    3. Boza, Pal & Evgeniou, Theodoros, 2021. "Artificial intelligence to support the integration of variable renewable energy sources to the power system," Applied Energy, Elsevier, vol. 290(C).
    4. Weinand, Jann Michael & Scheller, Fabian & McKenna, Russell, 2020. "Reviewing energy system modelling of decentralized energy autonomy," Energy, Elsevier, vol. 203(C).
    5. Emblemsvåg, Jan, 2022. "Wind energy is not sustainable when balanced by fossil energy," Applied Energy, Elsevier, vol. 305(C).
    6. Herath, N. & Tyner, W.E., 2019. "Intended and unintended consequences of US renewable energy policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    7. Huijia Yang & Weiguang Fan & Guangyu Qin & Zhenyu Zhao, 2021. "A Fuzzy-ANP Approach for Comprehensive Benefit Evaluation of Grid-Side Commercial Storage Project," Energies, MDPI, vol. 14(4), pages 1-17, February.
    8. Klaus Eisenack & Mathias Mier, 2019. "Peak-load pricing with different types of dispatchability," Journal of Regulatory Economics, Springer, vol. 56(2), pages 105-124, December.
    9. Gao, Yang & Meng, Yangyang & Dong, Guanpeng & Ma, Shaoxiu & Miao, Changhong & Xiao, Jianhua & Mao, Shuting & Shao, Lili, 2024. "The wind-solar hybrid energy could serve as a stable power source at multiple time scale in China mainland," Energy, Elsevier, vol. 305(C).
    10. Gorman, Nicholas & MacGill, Iain & Bruce, Anna, 2024. "Re-dispatch simplification analysis: Confirmation holism and assessing the impact of simplifications on energy system model performance," Applied Energy, Elsevier, vol. 365(C).
    11. Zerrahn, Alexander & Schill, Wolf-Peter & Kemfert, Claudia, 2018. "On the economics of electrical storage for variable renewable energy sources," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 108, pages 259-279.
    12. Joos, Michael & Staffell, Iain, 2018. "Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 86(C), pages 45-65.
    13. Subtil Lacerda, Juliana & van den Bergh, Jeroen C.J.M., 2020. "Effectiveness of an ‘open innovation’ approach in renewable energy: Empirical evidence from a survey on solar and wind power," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    14. Schrader, Simon Elias & Benth, Fred Espen, 2022. "A stochastic study of carbon emission reduction from electrification and interconnecting cable utilization. The Norway and Germany case," Energy Economics, Elsevier, vol. 114(C).
    15. Ignacio Mauleón, 2020. "Economic Issues in Deep Low-Carbon Energy Systems," Energies, MDPI, vol. 13(16), pages 1-32, August.
    16. Claude Crampes & Nils-Henrik M. von der Fehr, 2023. "Decentralised Cross-Border Interconnection," The Energy Journal, , vol. 44(4), pages 147-169, July.
    17. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.
    18. Mehigan, L. & Ó Gallachóir, Brian & Deane, Paul, 2022. "Batteries and interconnection: Competing or complementary roles in the decarbonisation of the European power system?," Renewable Energy, Elsevier, vol. 196(C), pages 1229-1240.
    19. Gerbaulet, C. & Weber, A., 2018. "When regulators do not agree: Are merchant interconnectors an option? Insights from an analysis of options for network expansion in the Baltic Sea region," Energy Policy, Elsevier, vol. 117(C), pages 228-246.
    20. Østergaard, P.A. & Lund, H. & Thellufsen, J.Z. & Sorknæs, P. & Mathiesen, B.V., 2022. "Review and validation of EnergyPLAN," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).

    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:enepol:v:189:y:2024:i:c:s030142152400154x. 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: http://www.elsevier.com/locate/enpol .

    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.