A new study has concluded that the economic value of energy storage increases as variable renewable energy generation increases its share of electricity supplied, however, the degree to which such variable renewable energy sources can be deployed hinges upon the future availability and cost of energy storage technologies.
The new study recently published in the journal Applied Energy was authored by researchers from the Massachusetts Institute of Technology (MIT) and Princeton University’s Andlinger Center for Energy and the Environment (ACEE), supported by General Electric (GE).
The research analysed battery storage technology in an effort to determine the key drivers impacting its economic value, how that value changes with increasing deployment over time, and the implications for energy storage’s long-term cost-effectiveness.
“Battery storage helps make better use of electricity system assets, including wind and solar farms, natural gas power plants, and transmission lines, and can defer or eliminate unnecessary investment in these capital-intensive assets,” said Dharik Mallapragada, research scientist at the MIT Energy Initiative (MITEI) and the paper’s lead author.
“Our paper demonstrates that this ‘capacity deferral,’ or substitution of batteries for generation or transmission capacity, is the primary source of storage value.”
There are other sources of value for energy storage identified by the report, including its ability to provide operating reserves to electricity system operators, avoiding fuel cost and wear & tear incurred by cycling on and off gas-fired power plants, as well as shifting energy from low price periods to high value periods.
However, the paper conclusively showed that these sources are of secondary importance compared to the value energy storage creates by helping to avoid capital-intensive capacity investments.
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