From Science Daily:
Government subsidies should be used to encourage investment in energy storage systems if renewable power is to be fully integrated into the sector, according to researchers at the University of East Anglia (UEA).
Variable output renewable energy systems, such as wind turbines and solar panels, are growing across Europe and contribute to supply and price volatility in electricity markets.
Systems for energy storage, for example reversed hydro power plants, large scale compressed air systems and batteries, provide ways to compensate for this variable power supply by storing excess power and releasing it when there is a production shortage.
However, the researchers argue that as the amount of renewable energy entering national power grids increases, so does the potential impact of volatility and therefore the need for storage. As subsidies for setting up renewable energy projects are gradually being removed, because they are reaching market maturity, these funds should instead be used to develop storage systems that could provide viable investment opportunities.
The study, led by Dr Dimitris Zafirakis and Dr Konstantinos Chalvatzis of UEA’s Norwich Business School, explored the potential of energy storage systems to return profits by buying when energy is cheap and selling when it is expensive, known as arbitrage. They tested this in a number of European electricity markets and matched various trading strategies and storage technologies with market characteristics.
The researchers found that this buy cheap, sell expensive approach alone cannot provide adequate revenue to justify investment. However, if the decarbonisation of electricity is to be…