Are electricity storage systems in the Netherlands indispensable or doable? Testing single-application electricity storage business models with exploratory agent-based modeling

S. A.R. Mir Mohammadi Kooshknow*, R. Herber, F. Ruzzenenti

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)
98 Downloads (Pure)

Abstract

Electricity storage systems (ESS) are hailed by many scholars and practitioners as a key element of the future electricity systems and a key step toward the transition to renewables. Nonetheless, the global speed of ESS implementation is relatively slow, and among possible reasons is the lack of viable business models. We developed an agent-based model to simulate the behavior of ESS within the Dutch electricity market. We adopted an exploratory modeling analysis (EMA) approach to investigate the effects of two single-application business models over a period of twenty years on the value of ESS from the perspective of both investors and the government under uncertainties in the ESS technical and economics characteristics, and uncertainties in market conditions and regulations. Our results show ESS is not profitable in most scenarios, and generally “wholesale arbitrage” business model leads to more profit than “reserve capacity”. In addition, ESS economic and technical characteristics play more important roles in the value of ESS than market conditions, and carbon pricing.

Original languageEnglish
Article number104008
Number of pages19
JournalJournal of Energy Storage
Volume48
DOIs
Publication statusPublished - Apr-2022

Keywords

  • Agent-based modeling
  • Business model
  • Electricity market
  • Electricity storage system
  • Energy transition

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