On the economics of electrical storage for variable renewable energy sources

Abstract

The use of renewable energy sources is a major strategy to mitigate climate\nchange. Yet Sinn (2017) argues that excessive electrical storage requirements\nlimit the further expansion of variable wind and solar energy. We question, and\nalter, strong implicit assumptions of Sinn's approach and find that storage\nneeds are considerably lower, up to two orders of magnitude. First, we move\naway from corner solutions by allowing for combinations of storage and\nrenewable curtailment. Second, we specify a parsimonious optimization model\nthat explicitly considers an economic efficiency perspective. We conclude that\nelectrical storage is unlikely to limit the transition to renewable energy.\n