Assessing Storage Value in Electricity Markets
Review and recommendations of the European Commission
The goal of this joint study is to identify the most relevant issues electricity storage is facing in the current European environment.
The specific aim of this report is
- To understand the current market environment for electricity storage including drivers and barriers to its deployment as well as the impact of technology developments
- To identify the methodologies used for assessing storage value as defined by the fundamental assumptions, the problem definition and the solving strategies
- To define the range of possible regulatory environments which could address the current challenges for electricity storage
To assess the economics of storage, different typs of models are used. “Engineering models” assess the storage through market data, without assessing its impact on the system. These approaches require less data and less complex modelling than “system approaches”. System approaches are used to assess real investment projects, or study long term system evolutions. Both approaches are complementary, as one answers the question from an investor’s point of view, in a given regulatory context, and the other answers the question of the interest of storage to increase social welfare.
The report concludes with a list of recommendations for research on the methodology and models, storage profitability and storage regulation.