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Title: Analyzing the potential economic value of energy storage
Authors: Giulietti, Monica
Grossi, Luigi
Trujillo-Baute, Elisa
Waterson, Michael
Keywords: Arbitrage
Electricity markets
Energy storage
Market clearing
Price forecasting
Issue Date: 2018
Publisher: International Association for Energy Economics
Citation: GIULIETTI, M. ... et al, 2018. Analyzing the potential economic value of energy storage. Energy Journal, 39 (SI1), pp.101-122
Abstract: This paper examines the commercial opportunities for electrical energy storage, 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 price times during the early evening, and relying on price forecasts one dayahead 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. It argues that additional incentives may need to be put into place in order to render storage over relatively longer periods more attractive and to deliver broader social benefits which are unlikely to be generated and captured as a result of purely commercial considerations.
Description: This article was published in the journal as Open Access under a Creative Commons Attribution 4.0 International (CC BY 4.0) licence.
Sponsor: The authors acknowledge support from the EPSRC under grant EP/K002228. Monica Giulietti also acknowledges support from the EPSRC under grants EP/N001745/1 and EPR062258/1 and from UKERC under grant UKERC/FF3/3. Elisa Trujillo-Baute also acknowledges support from the Generalitat de Catalunya (2015-SGR-531) and the Spanish Ministry of Economy (ECO2015-69107-R, MINECO/FEDER, UE).
Version: Published version
DOI: 10.5547/01956574.39.SI1.mgiu
URI: https://dspace.lboro.ac.uk/2134/33954
Publisher Link: https://doi.org/10.5547/01956574.39.SI1.mgiu
ISSN: 0195-6574
Appears in Collections:Published Articles (Economics)

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