TY - JOUR
T1 - Are electricity storage systems in the Netherlands indispensable or doable? Testing single-application electricity storage business models with exploratory agent-based modeling
AU - Mir Mohammadi Kooshknow, S. A.R.
AU - Herber, R.
AU - Ruzzenenti, F.
N1 - Funding Information:
This research was funded by University of Groningen project code 190152210. In addition, we would like to thank the Center for Information Technology of the University of Groningen for their support and for providing access to the Peregrine high performance computing cluster.
Funding Information:
This research was funded by University of Groningen project code 190152210. In addition, we would like to thank the Center for Information Technology of the University of Groningen for their support and for providing access to the Peregrine high performance computing cluster.
Publisher Copyright:
© 2022
PY - 2022/4
Y1 - 2022/4
N2 - 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.
AB - 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.
KW - Agent-based modeling
KW - Business model
KW - Electricity market
KW - Electricity storage system
KW - Energy transition
UR - http://www.scopus.com/inward/record.url?scp=85123369350&partnerID=8YFLogxK
U2 - 10.1016/j.est.2022.104008
DO - 10.1016/j.est.2022.104008
M3 - Article
AN - SCOPUS:85123369350
SN - 2352-152X
VL - 48
JO - Journal of Energy Storage
JF - Journal of Energy Storage
M1 - 104008
ER -