A simulation-based analysis of energy storage's impact on power markets for renewable energy integration

Abstract

The escalating threat of global warming, attributed to fossil fuel emissions, has spurred global efforts toward ambitious decarbonization initiatives. The transition towards renewable energy sources and the gradual phaseout of fossil fuels introduces complexities, notably the intermittent nature of renewables. Amid this paradigm shift, energy storage technologies increasingly play an essential role. Policymakers face the challenge of comprehensively assessing the potential impacts of these technologies on various facets of the energy system, including market prices, unsatisfied demand, and excess renewable generation. This study addresses this challenge through a simulation approach employing a deterministic discrete model, meticulously examining the 8760 annual hours based on real-world market data trends. The results indicate that the integration of energy storage with renewable power generation increases the reliability of renewables and significantly influences power market prices by acting as a complementary energy source. Insights derived from this simulation-based approach underscore the importance of optimizing storage capacity in tandem with broader renewable expansion strategies. Furthermore, aligning incentives to support these synergetic efforts proves critical. This approach provides essential perspectives and a decision support system for policymakers and researchers, contributing to global initiatives aimed at combating climate change and fostering a smooth transition to a decarbonized future.