Battery electricity storage as both a complement and substitute for cross-border interconnection

Andrea Biancardi, Carla Mendes and Iain Staffell

Energy Policy, 2024, vol. 189, issue C

Abstract: Cross-border interconnectors play a critical role in fulfilling the growing demand for cleaner and more affordable electricity. They are integral to completing the single energy market in Europe, so the European Union has set ambitious targets for the coming decade. Many challenges affect and delay the development of transmission infrastructure, and the deployment of non-wires alternatives such as battery energy storage systems may threaten the financial viability of these investments. We evaluate the potential impact of storage deployment on the profitability of cross-border interconnectors using the European electricity market model “EuroMod”. We find that higher battery penetration than projected in ENTSOE's TYNDP in 2030 significantly reduces transmission surplus (by €267 m to €506 m) under different battery uptake scenarios. To maintain the expected total surplus as projected by TYNDP in 2030, the continent-wide transmission capacity must decrease by 4.1–7.0%, potentially superseding 19–33% of planned transmission capacity expansions to 2030. Although cross-border interconnectors are of strategic importance for energy security and flexibility, the results highlight the pressing need for regulators, policymakers, and private investors to account for the rapid uptake of storage and integrate both storage and interconnectors in system planning.

Keywords: Electricity interconnectors; Merchant interconnectors; Transmission system operators; Non-wires alternatives; Electricity storage; Transmission (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:189:y:2024:i:c:s030142152400154x

DOI: 10.1016/j.enpol.2024.114134

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