Can Large-Scale Thermal Energy Storage Exploit the Effects of Renewable Generation on Wholesale Electricity Prices?

Abstract

Abstract Purpose of Review Electricity systems are experiencing increased penetrations of renewable generation. Because such resources have low, zero, or ( e . g ., due to policy choices) negative marginal costs, wholesale markets that operate such systems yield an increasing number of time periods with low or negative prices. Contemporaneously, wholesale energy prices tend to remain high during time periods with limited renewable-generation availability. These price dynamics have the potential to embiggen the economic value of energy storage. This paper examines the potential value proposition of energy-storage technologies that can exploit these changing price patterns and dynamics. Recent Findings We focus on the value of thermal energy storage, which is a commercially viable and scalable energy-storage technology, that sees less deployment compared to electro-chemical energy storage. We find that thermal energy storage and electro-chemical energy storage are economically viable. Thermal energy storage has some technical characteristics, including sizing flexibility and synchronous inertia, which may make it preferable under some scenarios. Summary Changing price patterns and dynamics are likely to improve the economic rationale of energy-storage technologies. This includes technologies that are receiving attention, such as electro-chemical energy storage, and other technologies, such as thermal energy storage.