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On current and future economics of electricity storage

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  • Albert Hiesl
  • Amela Ajanovic
  • Reinhard Haas

Abstract

Increasing electricity generation from variable renewable energy sources, such as wind and solar, has led to interest in additional short‐term and long‐term storage capacities. The core objective of this paper is to investigate the costs and the future market prospects of different electricity storage options, such as short‐term battery storage and long‐term storage as pumped hydro storage, as well as hydrogen and methane from power‐to‐gas conversion technologies. The method of approach is based on a formal economic framework with a dynamic component to derive scenarios up to 2040. The major conclusion is that the economic prospects of storage are not very bright. For all market‐based storage technologies it will become hard to compete in the wholesale electricity markets and for decentralized (battery) systems it will be hard to compete with the end users’ electricity price. The core problem of virtually all categories of storage are low full‐load hours (for market‐based systems) and low full charge/discharge cycles (for decentralized batteries). However, any new storage capacity should be constructed only in a coordinated way and if there is a clear sign for new excess production, in this case from variable renewables. In addition, for hydrogen and methane there could be better economic prospects in the transport sector due to both, higher energy price levels as well as a general lack of low carbon fuel alternatives. © 2020 The Authors. Greenhouse Gases: Science and Technology published by Society of Chemical Industry and John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:greenh:v:10:y:2020:i:6:p:1176-1192
    DOI: 10.1002/ghg.2030
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    4. Arjuna Nebel & Julián Cantor & Sherif Salim & Amro Salih & Dixit Patel, 2022. "The Role of Renewable Energies, Storage and Sector-Coupling Technologies in the German Energy Sector under Different CO 2 Emission Restrictions," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
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    6. Sabrine Ben Rhouma & Salaheddine Chabab & Daniel Broseta, 2024. "Synergies of storing hydrogen at the crest of CO2${\rm CO}_{2}$ or other gas storage," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 14(4), pages 587-606, August.
    7. Robert Huterski & Agnieszka Huterska & Ewa Zdunek-Rosa & Grażyna Voss, 2021. "Evaluation of the Level of Electricity Generation from Renewable Energy Sources in European Union Countries," Energies, MDPI, vol. 14(23), pages 1-18, December.
    8. Chris Johnathon & Ashish Prakash Agalgaonkar & Joel Kennedy & Chayne Planiden, 2021. "Analyzing Electricity Markets with Increasing Penetration of Large-Scale Renewable Power Generation," Energies, MDPI, vol. 14(22), pages 1-15, November.
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    10. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2021. "Feasibility of the Northern Sea Route for seasonal transit navigation: The role of ship speed on ice and alternative fuel types for the oil product tanker market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 259-283.

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