Joint Research Centre - European Commission

The European Commission's in-house science service
European Commission

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The way to future electricity storage is not clear-cut as many questions arise concerning technology, markets and regulations. The JRC provides some recommendations.© EU

Assessing the technological possibilities and economic value of electricity storage


Spurred by a renewed interest in power storage, the JRC provided several recommendations in a recently published report on how to improve assessing the economic value of storing electricity. Drafted in cooperation with the R&D department of Electricité de France (EDF), it presents an overview of the current research on the economic drivers or barriers (such as high costs, restrictions to offer certain services) for electricity storage.

The recommendations include for example to study more systematically how electricity storage could simultaneously provide services to different actors in the power system (for example, through optimising the portfolio of a power plant, delivering reserve power and managing grid bottlenecks), how future improvements of techno-economic parameters could influence the technological and economic viability of electricity storage and how "out of the box scenarios", such as the large scale deployment of power-to-gas technology, could impact the case for storage. These proposals are meant as guidance for further research and as a discussion base for policymakers.

The way to future electricity storage is not clear-cut as many questions arise concerning technology, markets and regulations. In addition, there is no universal answer to whether storage is a profitable investment or adds value to a system. The researchers reviewed over 200 publications from academia, consultants and industry and looked into the methodologies used to assess storage value and profitability. They also defined the regulatory possibilities which could address the current challenges for electricity storage.

The JRC report differentiates between two broad categories of studies. Engineering studies aim to assess the value of an investment without modelling the whole system, while system studies represent the effect of storage on the entire energy supply system. Recent engineering studies seem pessimistic about the possibility to earn sufficient revenues to pay back the significant investments in power and reserve markets, although some additional value pools have been identified. System studies identified storage value in many cases, but a negative impact is possible if the deployment of storage requires additional investment in grid or generation infrastructure.

Evaluating the economic value of future electricity storage requires making assumptions about storage regulations. These may range from fees and technical instructions, ownership questions or fundamental market regulation. Small technical rules can have a large impact on the viability of storage. In fact, any change in regulations will have an impact on electricity storage as the current frameworks for large-scale storage are not centrally regulated. New developments in the power system, such as the integration of renewable energy sources, will influence the discussions on storage and matters like ownership and operation of storage devices.