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

Ahamad Reza Mir Mohammadi Kooshknow*, Rien Herber, Franco Ruzzenenti

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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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 specific business models 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
JournalSolid earth
Publication statusSubmitted - 24-Dec-2021

Keywords

  • Electrical Engineering and Systems Science - Systems and Control

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