IDEAS home Printed from https://ideas.repec.org/p/enp/wpaper/eprg1626.html
   My bibliography  Save this paper

A simple introduction to the economics of storage: shifting demand and supply over time and space

Author

Listed:
  • David Newbery

    (Imperial College London and EPRG, Cambridge)

Abstract

The literature on electrical energy storage (EES) is technical and complex which this paper aims to simplify. It quantifies the current scale, costs and value of different types of EES and compares them to peaking generators and interconnectors. Worldwide, dams have 2,700 times the storage capacity of pumped storage, which accounts for 99% of conventional EES, batteries making up the rest. Indirect use of hydro power, and in future, electric vehicles, adds to their value and if accessible at reasonable cost, would be cheaper than conventional EES. EES, peakers and DC interconnectors can offer flexibility services which considerably enhance their value, but hopes of a battery revolution enabling a smarter electricity system should not be exaggerated.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Newbery, 2016. "A simple introduction to the economics of storage: shifting demand and supply over time and space," Working Papers EPRG 1626, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1626
    as

    Download full text from publisher

    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/12/eprg-wp1626.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ansar, Atif & Flyvbjerg, Bent & Budzier, Alexander & Lunn, Daniel, 2014. "Should we build more large dams? The actual costs of hydropower megaproject development," Energy Policy, Elsevier, vol. 69(C), pages 43-56.
    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. Xin Li & Konstantinos J. Chalvatzis & Phedeas Stephanides, 2018. "Innovative Energy Islands: Life-Cycle Cost-Benefit Analysis for Battery Energy Storage," Sustainability, MDPI, vol. 10(10), pages 1-19, September.
    2. 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.
    3. Abrell, Jan & Rausch, Sebastian & Streitberger, Clemens, 2019. "Buffering volatility: Storage investments and technology-specific renewable energy support," Energy Economics, Elsevier, vol. 84(S1).
    4. Jan Abrell & Sebastian Rausch & Clemens Streitberger, 2022. "The Economic and Climate Value of Flexibility in Green Energy Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(2), pages 289-312, October.
    5. 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.
    6. Newbery, David, 2018. "Evaluating the case for supporting renewable electricity," Energy Policy, Elsevier, vol. 120(C), pages 684-696.
    7. Kendall Mongird & Vilayanur Viswanathan & Patrick Balducci & Jan Alam & Vanshika Fotedar & Vladimir Koritarov & Boualem Hadjerioua, 2020. "An Evaluation of Energy Storage Cost and Performance Characteristics," Energies, MDPI, vol. 13(13), pages 1-53, June.
    8. 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.

    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. Ayobami Solomon Oyewo & Javier Farfan & Pasi Peltoniemi & Christian Breyer, 2018. "Repercussion of Large Scale Hydro Dam Deployment: The Case of Congo Grand Inga Hydro Project," Energies, MDPI, vol. 11(4), pages 1-30, April.
    2. Hannula, I. & Reiner, D., 2017. "The race to solve the sustainable transport problem via carbon-neutral synthetic fuels and battery electric vehicles," Cambridge Working Papers in Economics 1758, Faculty of Economics, University of Cambridge.
    3. Oyewo, Ayobami Solomon & Solomon, A.A. & Bogdanov, Dmitrii & Aghahosseini, Arman & Mensah, Theophilus Nii Odai & Ram, Manish & Breyer, Christian, 2021. "Just transition towards defossilised energy systems for developing economies: A case study of Ethiopia," Renewable Energy, Elsevier, vol. 176(C), pages 346-365.
    4. Scott, Ryan P. & Scott, Tyler A., 2019. "Investing in collaboration for safety: Assessing grants to states for oil and gas distribution pipeline safety program enhancement," Energy Policy, Elsevier, vol. 124(C), pages 332-345.
    5. Edward G. J. Stevenson, 2018. "Plantation Development in the Turkana Basin: The Making of a New Desert?," Land, MDPI, vol. 7(1), pages 1-11, January.
    6. Fearnside, Philip M., 2016. "Environmental and Social Impacts of Hydroelectric Dams in Brazilian Amazonia: Implications for the Aluminum Industry," World Development, Elsevier, vol. 77(C), pages 48-65.
    7. Ridgill, Michael & Neill, Simon P. & Lewis, Matt J. & Robins, Peter E. & Patil, Sopan D., 2021. "Global riverine theoretical hydrokinetic resource assessment," Renewable Energy, Elsevier, vol. 174(C), pages 654-665.
    8. Gumber, Anurag & Zana, Riccardo & Steffen, Bjarne, 2024. "A global analysis of renewable energy project commissioning timelines," Applied Energy, Elsevier, vol. 358(C).
    9. Shichao Yuan & Xizhuo Wang, 2024. "Increase or Reduce: How Does Rural Infrastructure Investment Affect Villagers’ Income?," Agriculture, MDPI, vol. 14(12), pages 1-21, December.
    10. James Randall Kahn & Carlos Edwar Freitas & Miguel Petrere, 2014. "False Shades of Green: The Case of Brazilian Amazonian Hydropower," Energies, MDPI, vol. 7(9), pages 1-20, September.
    11. Richard Swanson & Vivek Sakhrani, 2016. "The effects of climate risk on hydropower P3 contract value: Preliminary study of the Inga 3 Dam," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    12. Love, Peter E.D. & Ika, Lavagnon A. & Ahiaga-Dagbui, Dominic D., 2019. "On de-bunking ‘fake news’ in a post truth era: Why does the Planning Fallacy explanation for cost overruns fall short?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 397-408.
    13. Giorgio Locatelli, 2018. "Why are Megaprojects, Including Nuclear Power Plants, Delivered Overbudget and Late? Reasons and Remedies," Papers 1802.07312, arXiv.org.
    14. Al-Noor Abdullah & Sanzidur Rahman, 2021. "Social Impacts of a Mega-Dam Project as Perceived by Local, Resettled and Displaced Communities: A Case Study of Merowe Dam, Sudan," Economies, MDPI, vol. 9(4), pages 1-32, September.
    15. Shirley, Rebekah G. & Word, Jettie, 2018. "Rights, rivers and renewables: Lessons from hydropower conflict in Borneo on the role of cultural politics in energy planning for Small Island Developing States," Utilities Policy, Elsevier, vol. 55(C), pages 189-199.
    16. Garcia, Alexandre Schwinden & Alves, Frederick Fagundes & Pimentel Filgueiras, João Marcello, 2024. "Tariff flags and electricity consumption response in Brazil," Utilities Policy, Elsevier, vol. 88(C).
    17. Plakandaras, Vasilios & Papadimitriou, Theophilos & Gogas, Periklis, 2019. "Forecasting transportation demand for the U.S. market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 195-214.
    18. Farmer, J. Doyne & Ives, Matthew & Way, Rupert & Mealy, Penny, 2020. "Empirically grounded technology forecasts and the energy transition," INET Oxford Working Papers 2021-01, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, revised 2021.
    19. Kirchherr, Julian & Ahrenshop, Mats-Philip & Charles, Katrina, 2019. "Resettlement lies: Suggestive evidence from 29 large dam projects," World Development, Elsevier, vol. 114(C), pages 208-219.
    20. Sheila M. Olmstead & Hilary Sigman, 2015. "Damming the Commons: An Empirical Analysis of International Cooperation and Conflict in Dam Location," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 497-526.

    More about this item

    Keywords

    electrical energy storage; interconnectors; flexibility services;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    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:enp:wpaper:eprg1626. 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: Ruth Newman (email available below). General contact details of provider: https://edirc.repec.org/data/jicamuk.html .

    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.