The impact of electricity storage on wholesale electricity prices

Batsaikhan Nyamdash and Eleanor Denny ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes the impact of electricity storage on the production cost of a power system and the marginal cost of electricity (electricity price) using a unit commitment model. Also real world data has been analyzed to verify the e®ect of storage operation on the electricity price using econometric techniques. The unit commitment model found that the deployment of a storage system reduces the fuel cost of the power system but increases the average electricity price through its e®ect on the power system operation. However, the reduction in the production cost was found to be less than the increase in the consumer's cost of electricity resulting in a net increase in costs due to storage. Di®erent storage and CO2 price scenarios were investigated to study the sensitivity of these results. The regression analysis supports the unit commitment results and ¯nds that the presence of storage increases average wholesale electricity prices for the case study system.

Keywords: Electricity storage; Electricity price; Production cost (search for similar items in EconPapers)
JEL-codes: D4 P28 Q4 (search for similar items in EconPapers)
Date: 2011-10-08
New Economics Papers: this item is included in nep-ene
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Related works:
Journal Article: The impact of electricity storage on wholesale electricity prices (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:34941

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