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The Cost of Renewable Electricity and Energy Storage in Germany

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  • Nico Peter Benjamin Wehrle

    (Mendel University in Brno, Czech Republic)

Abstract

Renewable power generation, especially wind power and solar power, is experiencing a strong expansion worldwide and especially in Germany. With high shares of these methods of power generation, energy storage is needed to enable a demand-oriented power supply even with weather-related fluctuations in generation. Against the background of a power supply based entirely on wind and solar power, the question arises as to what total costs arise with the inclusion of storage systems, which is the subject of this article. The calculation model uses hourly resolved real data of German electricity generation from the years 2012 to 2018 to determine the required storage capacities. The electricity generation costs used range between 0.02 and 0.10 EUR/kW/h. The costs for the considered energy storages are calculated based on the Levelised Cost of Storage (LCOS) metric. It is concluded that in an electricity supply system based on wind and solar power, it is not the electricity generation that causes the greatest costs, but the storage. With electricity generation costs of 0.06 EUR/kW/h, the total system costs are in a range of 0.19 to 0.28 EUR/kW/h. This means that, in terms of costs, energy storage is more significant than electricity generation.

Suggested Citation

  • Nico Peter Benjamin Wehrle, 2022. "The Cost of Renewable Electricity and Energy Storage in Germany," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 8(1), pages 19-41.
    • Handle: RePEc:men:journl:v:8:y:2022:i:1:p:19-41
    DOI: 10.11118/ejobsat.2022.005
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    References listed on IDEAS

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    1. Heide, Dominik & von Bremen, Lueder & Greiner, Martin & Hoffmann, Clemens & Speckmann, Markus & Bofinger, Stefan, 2010. "Seasonal optimal mix of wind and solar power in a future, highly renewable Europe," Renewable Energy, Elsevier, vol. 35(11), pages 2483-2489.
    2. Weitemeyer, Stefan & Kleinhans, David & Vogt, Thomas & Agert, Carsten, 2015. "Integration of Renewable Energy Sources in future power systems: The role of storage," Renewable Energy, Elsevier, vol. 75(C), pages 14-20.
    3. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    energy storage; renewable energy sources; Germany; levelised cost of storage;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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