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Overcoming barriers to electrical energy storage: Comparing California and Europe

Author

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  • Francisco Castellano
  • Michael G. Pollitt

Abstract

Multiple market drivers suggest that electrical energy storage (EES) systems are going to be essential for future power systems within the next decade. However, the deployment of the technology is proceeding at very different rates around the world. Whereas the sector is progressing quickly in California, it is not gaining much traction, so far, in Europe. This research aims to clarify why the prospects for energy storage in Europe are not as good as they are in California. The market and regulatory framework in California and Europe are analysed critically, and changes to overcome the main barriers are recommended. The research shows that the main barriers are: inadequate definition and classification of EES in legislation; lack of markets for some ancillary services; inadequate market design that benefits traditional technologies; and the lack of need for EES in some jurisdictions. The prospects are better in California because regulation is more advanced and favourable for the technology, and regulators are collaborating with developers and utilities to analyse barriers and solutions for the technology. In Europe, there is a need to clarify the definition of EES, create new markets for ancillary services, design technology-neutral market rules and study more deeply the necessity of EES.

Suggested Citation

  • Francisco Castellano & Michael G. Pollitt, 2016. "Overcoming barriers to electrical energy storage: Comparing California and Europe," Cambridge Working Papers in Economics 1629, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1629
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    Cited by:

    1. 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.
    2. Andrew Burlinson & Monica Giulietti, 2018. "Non-traditional business models for city-scale energy storage: evidence from UK case studies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(2), pages 215-242, June.
    3. Newbery, David & Pollitt, Michael G. & Ritz, Robert A. & Strielkowski, Wadim, 2018. "Market design for a high-renewables European electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 695-707.
    4. Anaya, K. & Pollitt, M., 2018. "Storage Business Models: Lessons for Electricity from Natural Gas, Cloud Data and Frozen Food," Cambridge Working Papers in Economics 1810, Faculty of Economics, University of Cambridge.
    5. 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).
    6. 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.

    More about this item

    Keywords

    electrical energy storage; battery; market design;
    All these keywords.

    JEL classification:

    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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