Full Title: Electricity Storage and Renewables: How Investments Change as Technology Improves
Author(s): Christian Kaps, Simone Marinesi, Serguei Netessine
Publisher(s): Kleinman Center for Energy Policy
Publication Date: April 26, 2021
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Description (excerpt):
Facing the realities of climate change, scarce natural resources, and geopolitical uncertainty, many consumers, utilities, and regulators move toward renewable energies. In 2019, of the 245 gigawatts (GW) of power generation capacity that were added around the world, 72% was renewable, of which wind and solar accounted for the lion’s share (IRENA 2019). Yet, generation capacities are not created equal. While conventional power plants predictably produce energy for well over 90% of their scheduled time, wind turbines produce electricity at an erratic and unpredictable rate, and the sun does not always shine on a solar panel. Simultaneously, customers expect electricity to be available at the flip of a switch and demand varies across days, weeks, and seasons. Hence, when shifting energy grids toward a more renewable future, one needs to match demand with an increasingly variable and less controllable supply. To ensure grid stability, we must rely on large-scale energy storage. Yet, actual market adoption of storage is minuscule, and it is currently not well understood what technology or regulation is needed to drive capacity investments. We will explore what is required, from a strategic level, to see large-scale storage adoption.