On the economics of electrical storage for variable renewable energy sources

Abstract

The use of renewable energy sources is a major strategy to mitigate climate change.Yet Sinn (2017) argues that excessive electrical storage requirements limit the further expansion of variable wind and solar energy. We question, and alter, strong implicit assumptions of Sinn's approach and find that storage needs are considerably lower, up to two orders of magnitude. First, we move away from corner solutions by allowing for combinations of storage and renewable curtailment. Second, we specify a parsimonious optimization model that explicitly considers an economic efficiency perspective. We conclude that electrical storage is unlikely to limit the transition to renewable energy.

Buffering Volatility: Storage Investments and Technology-Specific Renewable Energy Support

“…First, given the available cost estimates for storage, the economically optimal storage capacity to integrate intermittent RE supply consistent with a 70% RE target is moderate in any case: under Medium cost assumptions, and a technology-neutral RE support, roughly doubling the level of existing capacities would be sufficient for the German electricity market; under Low cost assumptions, the optimal storage level is about 150 GWh or four times larger than the currently installed level. These findings are in line with large parts of the literature; see, for example, Zerrahn et al (2018) and the studies cited therein. Zerrahn et al (2018) find that for a RE target of 70%, the optimal storage level is 230 GWh which lies both within the range of estimates obtained by our approach as well as the bulk of the literature.…”

“…These findings are in line with large parts of the literature; see, for example, Zerrahn et al (2018) and the studies cited therein. Zerrahn et al (2018) find that for a RE target of 70%, the optimal storage level is 230 GWh which lies both within the range of estimates obtained by our approach as well as the bulk of the literature.…”

“…seasons (for example, by either shifting solar generation from day to night or from summer to winter, or wind generation from off-peak to peak hours). 1 Much of the academic literature and ongoing discussions among policymakers have focused on the question how energy storage can serve as a buffering mechanism to cope with the volatility and system integration costs induced by intermittent RE sources (Hirth, 2015;Gowrisankaran et al, 2016;Sinn, 2017;Zerrahn et al, 2018). At the same time, there are considerable uncertainties as well as concerns about the costs, availability, and potentials of future storage technologies, in particular when deployed at the large scales required for deep decarbonization.…”

Open Power System Data – Frictionless data for electricity system modelling

“…It provides a wide range of data at one place, is easily accessible, clean and ready-to-use, permanently available and versioncontrolled. The large number of users -around 100, 000 unique visitors during 2017) -and, more importantly, the amount of research that makes use of OPSD -26 published papers by the time of writing since the go-live in late 2016, out of which 12 are published papers in high quality journals indexed in the SCI/SSCI [13,[40][41][42][43][44][45][46][47][48][49][50] and 14 in other journals, conference papers, books and grey literature [51][52][53][54][55][56][57][58][59][60][61][62][63][64] -suggest that the platform fulfils a need and provides value to electricity system modellers.…”

Wind Turbines as Additional Power Supply

“…Previous research has demonstrated that the use of renewable energy sources is a key strategy for reducing greenhouse gases. As the source of hydro, biomass or geothermal energy is limited in many countries, wind power and solar photovoltaic (PV) play an increasing role [3].…”