The competitiveness of battery storage in the electricity market

Gray, Danny; Rojas, Matías

The competitiveness of battery storage in the electricity market

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Citation

Gray, D, Rojas, M. The competitiveness of battery storage in the electricity market. 2023. handle: http://hdl.handle.net/10230/58418

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Abstract

We build an electricity market model for Chile to investigate the competitiveness of utility-scale battery storage as costs change. We find that batteries are competitive from the social planner’s perspective under current costs and provide clear benefits. We show how the optimal allocation of battery capacity increases with lower future costs. We demonstrate that policy interventions, such as carbon taxes and cost subsidies, are effective in improving battery competitiveness. In addition, we highlight the complementarities between renewable generation and batteries. Battery competitiveness can and will improve. However, other frictions must also be overcome to ensure batteries operate in the market.

Description

Treball fi de màster de: Master's Degree in Specialized Economic Analysis: Economics of Energy, Climate Change, and Sustainability Program. Curs 2022-2023
Tutora: Mar Reguant