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Policy and Regulation for Energy Storage Systems

Miguel Vazquez and Matteo di Castelnuovo

No 106, IEFE Working Papers from IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy

Abstract: We analyze the changes in the regulation of electricity systems required to adapt to the presence of energy storage. To that end, we begin by identifying different types of services provided by storage. As services have different economic properties, the economic mechanisms required to organize them will be different as well. There are two relevant “arenas” for storage services: i) buy and sell energy in different periods (including energy related to ancillary services); and ii) avoid the need to transport energy from one point to another, i.e. the need to use transmission and/or distribution networks. Consequently, this involves two kinds of regulatory challenges, because storage compete with different types of services. The first regulatory challenge is related to wholesale market design, because flexibility services can be sold in “competitive” wholesale markets (energy, ancillary services, etc.). The second regulatory challenge has to do with the regulation of energy networks, because storage services may avoid the use of “regulated” networks. Consequently, network rules should allow them to compete in a technologically neutral manner.

Keywords: Energy Storage Systems; Market Design; Network Regulation (search for similar items in EconPapers)
JEL-codes: D23 D82 L51 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-knm and nep-reg
Date: 2018
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