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Research Report / Electricity

Electricity Storage: How to Facilitate its Deployment and Operation in the EU (THINK Topic 8)

Author(s): RUESTER Sophia, VASCONCELOS Jorge, HE Xian, CHONG Eshien, GLACHANT Jean-Michel

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ABSTRACT

This report was produced as part of the THINK project. The future electricity system will face various challenges originating from both supply and demand side. Adaptations in system architecture are required to allow for decarbonization while ensuring stability and reliability of the system. Many claim today that larger variability and intermittency of supply must inevitably be accompanied by a significant development of electricity storage. This explains the ever growing attention that electricity storage starts to receive recently from utilities, transmission and distribution system operators, manufacturers, researchers and policy makers. However, electricity storage technologies are only one possible type of means, amongst others like flexible generation and demand side management, to provide various services (such as capacity firming, voltage and frequency control, back-up capacity, or inter-temporal arbitrage) to the system. To face up with the challenges of the future power system, a comprehensive approach to assess how to enable the development and deployment of electricity storage (and in the broader sense also of other flexibility means) has to be developed. This report analyzes whether the benefits that electricity storage can provide are already recognized and valorized by the existing market design and regulation. First, the drivers for electricity storage deployment in power systems are investigated and it is asked whether electricity storage is a special class of assets for the future power system that should be supported by some particular market design or regulation. Second, evidence is collected on which conditions have led to a more ambitious development and use of storage in selected non-European countries. Third, a systematic approach to identify viable business models in the European power system is provided. Finally, it is discussed whether current market rule setting and regulation allow these business models.

THINK Topic 8 was led by Jorge Vasconcelos