Investment cost accounting for energy storage industry

Can energy storage be a strategic investment under competition?

These market dynamics serve as a motivation for this study to understand strategic investments in energy storage under competition, taking into account storage impact on the market price. Our work uses energy arbitrage as a test case with the intent to explore additional services in the future.

Should investors invest in energy storage technology?

For those who decide to invest, limited and declining revenue prospects could lead to competing strategies of energy storage investment and operation, where investors opt for technologies with specific technical attributes in the competitive market.

Is energy storage a price-maker?

When it comes to accounting for energy storage as a price-maker, some studies (e.g., , , , ) only consider the operation of the energy storage asset without accounting for the decision and cost of the storage energy- and power-capacity investment itself.

Can multiple energy storage investors invest in heterogeneous storage technologies?

Our work studies the strategic investment behavior among multiple energy storage investors in CAISO. These investors can choose to invest in heterogeneous storage technologies. At the beginning of an investment horizon, each investor decides the invested energy and power capacities.

How does energy storage work?

First, energy storage usually has a low operation cost since no fuel is directly consumed , . Then, the profit-seeking investors will always charge the storage at the lowest prices during the day. To get non-negative revenue, the investor’s cost from charge must be no higher than the market revenue from the discharge (at high prices).

Is electricity storage an economic solution?

Electricity storage is currently an economic solution of-grid in solar home systems and mini-grids where it can also increase the fraction of renewable energy in the system to as high as 100% (IRENA, 2016c). The same applies in the case of islands or other isolated grids that are reliant on diesel-fired electricity (IRENA, 2016a; IRENA, 2016d).