Smoothing the Green Transition: Which Battery Locations Provide the Greatest Returns to Renewable Generation in California

Matthew Dudek

No 404734, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: California’s renewable portfolio standard requires a rapid de-carbonization of the state’s electricity supply by 2045. Despite renewables’ falling fixed costs, increased reliance on intermittent, primarily solar, generation creates two challenges for California’s grid operator. First, maximum solar generation does not coincide with peak demand during the day. Second, locations with the greatest generation potential are distant from the state’s demand centers. The spatial and temporal mismatch between renewable supply and demand increases the frequency of line congestion, causing localized curtailment despite the willingness to pay elsewhere. Utility-scale storage promises to mitigate the inefficiencies of intermittent generation by allowing owners to arbitrage electricity across time and space. My research investigates whether batteries operating in California’s wholesale electricity market have increased the productivity of renewables, indicated by reductions in curtailment, and whether these impacts varied with batteries’ location. I find that the marginal MWh of electricity used to charge batteries at noon in California resulted in a 0.5 MWh reduction in solar curtailment, which was largely driven by storage capacity additions near solar generators.

Keywords: Resource; /Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 50
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404734

DOI: 10.22004/ag.econ.404734

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