Abstract
The use of renewable energy sources is a major strategy to mitigate climate change. Yet Sinn (2017) argues that excessive electrical storage requirements limit the further expansion of variable wind and solar energy. We question, and alter, strong implicit assumptions of Sinn’s approach and find that storage needs are considerably lower, up to two orders of magnitude. First, we move away from corner solutions by allowing for combinations of storage and renewable curtailment. Second, we specify a parsimonious optimization model that explicitly considers an economic efficiency perspective. We conclude that electrical storage is unlikely to limit the transition to renewable energy.
Highlights
In the 2015 Paris Agreement, the world agreed on ambitious targets for reducing greenhouse gas emissions to combat climate change (United Nations, 2015)
As the potentials of hydro, biomass or geothermal energy are limited in many countries, wind power and solar photovoltaics (PV) play an increasing role
Using a parsimonious optimization model with a more suitable economic objective function that leads to first-best solutions, we find moderate storage requirements
Summary
In the 2015 Paris Agreement, the world agreed on ambitious targets for reducing greenhouse gas emissions to combat climate change (United Nations, 2015). For example in Germany, often considered as a frontrunner in the use of variable renewable energy sources, the government plans to expand the share of renewable energy in gross electricity consumption to at least 80% by 2050, compared to 36% in 2017 and only around 3% in the early 1990s (Federal Ministry for Economic Affairs and Energy, 2018). Closing this gap requires a massive further expansion of wind and solar power. Electrical storage can provide a solution, for instance, in the form of batteries or pumped-hydro storage plants, allowing to shift energy over time
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