Analysing the potential economic value of energy storage

Lisa Flatley (), Monica Giulietti, Luigi Grossi, Elisa Trujillo-Baute and Michael Waterson
Additional contact information
Lisa Flatley: University of Warwick

No 2016/2, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: This paper examines the likely market for electrical energy storage from a market viewpoint, taking market prices as given and determining the extent to which a strategy of arbitrage across the day, buying at the lowest price times at night and selling at the highest times during the early evening, generates profits in the British context. The paper sets out the potential problems as the market moves to absorb increasing amounts of wind, then characterises the nature of prices, which reveals the importance of a strategy in which power is absorbed into store for a relatively few hours of the day and discharged over a relatively few hours. The paper models the ongoing costs of operation and compares them with revenues, but does not consider construction costs. It argues that additional incentives may need to be put into place in order to render storage over relatively longer periods more attractive.

Keywords: Energy storage; arbitrage; electricity markets; market clearing (search for similar items in EconPapers)
JEL-codes: D24 H54 L94 L98 Q41 Q47 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://ieb.ub.edu/wp-content/uploads/2018/04/2016-IEB-WorkingPaper-02.pdf (application/pdf)

Related works:
Journal Article: Analyzing the Potential Economic Value of Energy Storage (2018)
Journal Article: Analyzing the Potential Economic Value of Energy Storage (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2016-2

Access Statistics for this paper

More papers in Working Papers from Institut d'Economia de Barcelona (IEB) Contact information at EDIRC.
Bibliographic data for series maintained by ().