Optimal electricity consumption and storage under short-term renewable supply variability

Martin Dhaussy, Nandeeta Neerunjun () and Hubert Stahn ()
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Martin Dhaussy: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique
Nandeeta Neerunjun: GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes
Hubert Stahn: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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Abstract: The expansion of intermittent renewable electricity increases supply variability and requires greater flexibility from consumers. This results in welfare losses for agents who are averse to fluctuations. Our model analyzes these welfare consequences by considering short-term and exogenous variability in renewable energy generation. We explore an optimal control problem that determines a welfare-maximizing electricity consumption path by controlling dispatchable energy and storage. This optimization problem identifies three scenarios: no active storage, abundant storage capacities and limited capacities. We then derive an overall consumer welfare function for alternative energy mixes. This allows us to assess the welfare effects of changing the energy mix. In particular, we consider the substitution of dispatchable fossil-fueled energy generation by renewable energy.

Keywords: Welfare analysis; Optimal control; Electricity consumption; Energy storage; Intermittent renewable (search for similar items in EconPapers)
Date: 2026-10
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Published in Journal of Economic Dynamics and Control, 2026, pp.105440. ⟨10.1016/j.jedc.2026.105440⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05802643

DOI: 10.1016/j.jedc.2026.105440

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