Storage and Renewable Energies: Friends or Foes?

Andrés-Cerezo, David and Natalia Fabra
Authors registered in the RePEc Author Service: David Andrés-Cerezo

No 19294, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Decarbonizing the power sector requires major investments in renewables and storage. Though often seen as complementary, these technologies can act as substitutes from an economic perspective. When renewable output correlates positively with demand and capacity is low, storage may lower renewable profits, and vice versa — especially with strategic thermal producers. In markets with negatively correlated renewables, like solar and wind, storage can benefit one while disadvantaging the other. These findings inform policies on the timing and effectiveness of mandates or subsidies, suggesting that solar investments may need an initial push before supporting storage. Simulations of the Spanish market show that, at high solar penetration, storage boosts solar profits but reduces wind profits.

Keywords: market; power (search for similar items in EconPapers)
JEL-codes: L94 Q40 Q42 Q48 Q50 (search for similar items in EconPapers)
Date: 2024-07
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Working Paper: Storage and Renewable Energies: Friends or Foes? (2025)
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