Electricity storage and transmission: Complements or substitutes?

Arbeitspapier

Electricity from renewable sources often cannot be generated when and where it is needed. To deal with these temporal and spatial discrepancies, one frequently proposed approach is to expand storage capacities and transmission grids. It is often argued that the two technologies substitute each other, such that deploying one reduces the need for the other. Using a theoretical model, we show that storage capacities and transmission grids can also be complements if electricity system costs are minimized. We present the conditions that determine the kind of interdependence at specific storage locations: the characteristics of transmission congestion and the alignment of marginal generation costs between adjacent regions. By applying our theoretical insights to Italian power system data, we obtain empirical evidence that storage and transmission can act as either substitutes or complements. Planners of long-lasting and costly infrastructure can use the results to avoid design errors such as a misplacement of storage within the system.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 95/2018

Classification and Topics

• Classification: Wirtschaft ; Optimization Techniques; Programming Models; Dynamic Analysis ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Electric Utilities ; Energy: Demand and Supply; Prices ; Alternative Energy Sources
• Subject: power grid ; energy system ; infrastructure planning ; energy transition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Neetzow, Paul ; Pechan, Anna ; Eisenack, Klaus
• Event: Veröffentlichung
• (who): Humboldt-Universität zu Berlin, Faculty of Life Sciences, Department of Agricultural Economics
• (where): Berlin
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/213299
• Last update: 10.03.2025, 11:43 AM CET