IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v73y2021ics0957178721001466.html
   My bibliography  Save this article

The status of and opportunities for utility-scale battery storage in Australia: A regulatory and market perspective

Author

Listed:
  • Csereklyei, Zsuzsanna
  • Kallies, Anne
  • Diaz Valdivia, Andres

Abstract

Australia's electricity market is rapidly adding renewable energy generation. Utility-scale batteries could have a major role in facilitating these transitions; however, their deployment is still largely state-subsidized. We summarize the current and future roles for batteries from a legal-economic perspective in the context of Australia's electricity market framework. We find that the future of batteries in Australia is not only a function of the large-scale deployment of renewables, their cost development and the comparative future cost of competing gas turbines but also of national electricity market and state policy reforms focusing on reliability.

Suggested Citation

  • Csereklyei, Zsuzsanna & Kallies, Anne & Diaz Valdivia, Andres, 2021. "The status of and opportunities for utility-scale battery storage in Australia: A regulatory and market perspective," Utilities Policy, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:juipol:v:73:y:2021:i:c:s0957178721001466
    DOI: 10.1016/j.jup.2021.101313
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178721001466
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2021.101313?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. Anuta, Oghenetejiri Harold & Taylor, Phil & Jones, Darren & McEntee, Tony & Wade, Neal, 2014. "An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 489-508.
    2. Carlsson, Fredrik & Martinsson, Peter, 2008. "Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages," Energy Economics, Elsevier, vol. 30(3), pages 1232-1245, May.
    3. Winfield, Mark & Shokrzadeh, Shahab & Jones, Adam, 2018. "Energy policy regime change and advanced energy storage: A comparative analysis," Energy Policy, Elsevier, vol. 115(C), pages 572-583.
    4. Paul L. Joskow, 2008. "Lessons Learned From Electricity Market Liberalization," The Energy Journal, , vol. 29(2_suppl), pages 9-42, December.
    5. Monica Giulietti, Luigi Grossi, Elisa Trujillo Baute, and Michael Waterson, 2018. "Analyzing the Potential Economic Value of Energy Storage," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    6. Paul L Joskow, 2019. "Challenges for wholesale electricity markets with intermittent renewable generation at scale: the US experience," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(2), pages 291-331.
    7. Carlsson, Fredrik & Martinsson, Peter & Akay, Alpaslan, 2011. "The effect of power outages and cheap talk on willingness to pay to reduce outages," Energy Economics, Elsevier, vol. 33(5), pages 790-798, September.
    8. Sakti, Apurba & Botterud, Audun & O’Sullivan, Francis, 2018. "Review of wholesale markets and regulations for advanced energy storage services in the United States: Current status and path forward," Energy Policy, Elsevier, vol. 120(C), pages 569-579.
    9. Afzal S. Siddiqui, Ramteen Sioshansi, and Antonio J. Conejo, 2019. "Merchant Storage Investment in a Restructured Electricity Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    10. Malcolm Abbott, 2006. "The Performance Of An Electricity Utility: The Case Of The State Electricity Commission Of Victoria, 1925–93," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 46(1), pages 23-44, March.
    11. Ramteen Sioshansi, 2011. "Increasing the Value of Wind with Energy Storage," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-30.
    12. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    13. Wolf-Peter Schill & Claudia Kemfert, 2011. "Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-88.
    14. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    15. Francisco Castellano Ruz & Michael G. Pollitt, 2016. "Overcoming barriers to electrical energy storage: Comparing California and Europe," Working Papers EPRG 1614, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    16. de Nooij, Michiel & Koopmans, Carl & Bijvoet, Carlijn, 2007. "The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks," Energy Economics, Elsevier, vol. 29(2), pages 277-295, March.
    17. Ramteen Sioshansi, 2010. "Welfare Impacts of Electricity Storage and the Implications of Ownership Structure," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 173-198.
    18. Bradbury, Kyle & Pratson, Lincoln & Patiño-Echeverri, Dalia, 2014. "Economic viability of energy storage systems based on price arbitrage potential in real-time U.S. electricity markets," Applied Energy, Elsevier, vol. 114(C), pages 512-519.
    19. Francisco Castellano Ruz & Michael G. Pollitt, 2016. "Overcoming Barriers to Electrical Energy Storage," Competition and Regulation in Network Industries, , vol. 17(2), pages 123-149, June.
    20. McConnell, Dylan & Forcey, Tim & Sandiford, Mike, 2015. "Estimating the value of electricity storage in an energy-only wholesale market," Applied Energy, Elsevier, vol. 159(C), pages 422-432.
    21. Nicolas Astier and Xavier Lambin, 2019. "Ensuring Capacity Adequacy in Liberalised Electricity Markets," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mwampashi, Muthe Mathias & Nikitopoulos, Christina Sklibosios & Rai, Alan, 2024. "From 30- to 5-minute settlement rule in the NEM: An early evaluation," Energy Policy, Elsevier, vol. 194(C).
    2. Coriolano Salvini & Ambra Giovannelli, 2022. "Techno-Economic Comparison of Utility-Scale Compressed Air and Electro-Chemical Storage Systems," Energies, MDPI, vol. 15(18), pages 1-16, September.
    3. Csereklyei, Zsuzsanna & Kallies, Anne, 2022. "A legal-economic framework of electricity markets: Assessing Australia’s transition," MPRA Paper 114191, University Library of Munich, Germany.
    4. Csereklyei, Zsuzsanna & Khezr, Peyman, 2024. "How do changes in settlement periods affect wholesale market prices? Evidence from Australia's National Electricity Market," Energy Economics, Elsevier, vol. 132(C).

    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. Williams, Olayinka & Green, Richard, 2022. "Electricity storage and market power," Energy Policy, Elsevier, vol. 164(C).
    2. Loisel, Rodica & Simon, Corentin, 2021. "Market strategies for large-scale energy storage: Vertical integration versus stand-alone player," Energy Policy, Elsevier, vol. 151(C).
    3. Albert Hiesl & Amela Ajanovic & Reinhard Haas, 2020. "On current and future economics of electricity storage," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 10(6), pages 1176-1192, December.
    4. Karim L. Anaya & Michael G. Pollitt, 2018. "Storage Business Models: Lessons for Electricity from Natural Gas, Cloud Data and Frozen Food," Working Papers EPRG 1804, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    5. Shan, Rui & Abdulla, Ahmed & Li, Mingquan, 2021. "Deleterious effects of strategic, profit-seeking energy storage operation on electric power system costs," Applied Energy, Elsevier, vol. 292(C).
    6. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    7. Reinhard Haas & Claudia Kemfert & Hans Auer & Amela Ajanovic & Marlene Sayer & Albert Hiesl, 2022. "On the economics of storage for electricity: Current state and future market design prospects," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(3), May.
    8. Intini, Mario & Waterson, Michael, 2020. "Do British wind generators behave strategically in response to the Western Link interconnector?," CAGE Online Working Paper Series 455, Competitive Advantage in the Global Economy (CAGE).
    9. Csereklyei, Zsuzsanna & Kallies, Anne, 2022. "A legal-economic framework of electricity markets: Assessing Australia’s transition," MPRA Paper 114191, University Library of Munich, Germany.
    10. Ahmed Gailani & Tracey Crosbie & Maher Al-Greer & Michael Short & Nashwan Dawood, 2020. "On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers," Energies, MDPI, vol. 13(5), pages 1-20, March.
    11. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    12. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    13. Woo, C.K. & Ho, T. & Shiu, A. & Cheng, Y.S. & Horowitz, I. & Wang, J., 2014. "Residential outage cost estimation: Hong Kong," Energy Policy, Elsevier, vol. 72(C), pages 204-210.
    14. Debia, Sébastien & Pineau, Pierre-Olivier & Siddiqui, Afzal S., 2021. "Strategic storage use in a hydro-thermal power system with carbon constraints," Energy Economics, Elsevier, vol. 98(C).
    15. Jin, Taeyoung & Lee, Tae Eui & Kim, Dowon, 2023. "Value of lost load estimation for the South Korea's manufacturing sector—finding the gap between the supply and demand side," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    16. Ramteen Sioshansi & Paul Denholm & Thomas Jenkin, 2012. "Market and Policy Barriers to Deployment of Energy Storage," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    17. Lin, Boqiang & Wu, Wei, 2017. "Economic viability of battery energy storage and grid strategy: A special case of China electricity market," Energy, Elsevier, vol. 124(C), pages 423-434.
    18. Greve, Thomas & Teng, Fei & Pollitt, Michael G. & Strbac, Goran, 2018. "A system operator’s utility function for the frequency response market," Applied Energy, Elsevier, vol. 231(C), pages 562-569.
    19. Mercier, Thomas & Olivier, Mathieu & De Jaeger, Emmanuel, 2023. "The value of electricity storage arbitrage on day-ahead markets across Europe," Energy Economics, Elsevier, vol. 123(C).
    20. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.

    More about this item

    Keywords

    Utility-scale batteries; Electricity market regulation; Australia;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

    Statistics

    Access and download statistics

    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:juipol:v:73:y:2021:i:c:s0957178721001466. 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: https://www.sciencedirect.com/journal/utilities-policy .

    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.