Abstract
SummaryRapid growth of intermittent renewable power generation makes the identification of investment opportunities in energy storage and the establishment of their profitability indispensable. Here we first present a conceptual framework to characterize business models of energy storage and systematically differentiate investment opportunities. We then use the framework to examine which storage technologies can perform the identified business models and review the recent literature regarding the profitability of individual combinations of business models and technologies. Our analysis shows that a set of commercially available technologies can serve all identified business models. We also find that certain combinations appear to have approached a tipping point toward profitability. Yet, this conclusion only holds for combinations examined most recently or stacking several business models. Many technologically feasible combinations have been neglected, indicating a need for further research to provide a detailed and conclusive understanding about the profitability of energy storage.
Highlights
As the reliance on renewable energy sources rises, intermittency and limited dispatchability of wind and solar power generation evolve as crucial challenges in the transition toward sustainable energy systems (Olauson et al, 2016; Davis et al, 2018; Ferrara et al, 2019)
Since electricity storage is widely recognized as a potential buffer to these challenges (Fares and Webber, 2017; Kittner et al, 2017; Davies et al, 2019), the number of advancements in energy storage technology and the amount of deployed capacity have rapidly grown in recent years (Schmidt et al, 2017; Comello et al, 2018; Sutherland, 2019; Blanc et al, 2020)
Others have reviewed the range of potential applications of storage technologies, that is, the services that storage facilities can perform in power systems (Koohi-Kamali et al, 2013; Kousksou et al, 2014; Palizban and Kauhaniemi, 2016). Building upon both strands of work, we propose to characterize business models of energy storage as the combination of an application of storage with the revenue stream earned from the operation and the market role of the investor
Summary
As the reliance on renewable energy sources rises, intermittency and limited dispatchability of wind and solar power generation evolve as crucial challenges in the transition toward sustainable energy systems (Olauson et al, 2016; Davis et al, 2018; Ferrara et al, 2019). Others have reviewed the range of potential applications of storage technologies, that is, the services that storage facilities can perform in power systems (Koohi-Kamali et al, 2013; Kousksou et al, 2014; Palizban and Kauhaniemi, 2016) Building upon both strands of work, we propose to characterize business models of energy storage as the combination of an application of storage with the revenue stream earned from the operation and the market role of the investor. Such business models can be used to systematically differentiate investment opportunities, to assess which storage technologies are capable of serving a business model, and to review the profitability of individual combinations of business models and technologies
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