Abstract
Significant natural gas and electricity price variation and volatility, especially during the past few years, raise questions about understanding the value drivers behind electricity storage. The impact of these drivers for pure storage (such as pumped hydroelectric storage) and compressed air energy storage (CAES) are different and in this paper we explore these differences in operation and net revenue over a variety of timescales. We also consider the arbitrage value that is attainable in practice and explain why simple forecasting techniques based on historical data will generally be less successful for CAES. The breakeven cost of storage and how this can depend on regulatory treatment of storage and market structure is also considered.
Original language | American English |
---|---|
Pages (from-to) | 56-66 |
Number of pages | 11 |
Journal | Energy Economics |
Volume | 33 |
Issue number | 1 |
DOIs | |
State | Published - 2011 |
NREL Publication Number
- NREL/JA-6A20-47865
Keywords
- Arbitrage
- Energy storage
- Investment decisions
- Natural gas prices