Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/213299
Authors: 
Neetzow, Paul
Pechan, Anna
Eisenack, Klaus
Year of Publication: 
2018
Series/Report no.: 
Working Paper 95/2018
Abstract: 
Electricity from renewable sources often cannot be generated when and where it is needed. To deal with these temporal and spatial discrepancies, one frequently proposed approach is to expand storage capacities and transmission grids. It is often argued that the two technologies substitute each other, such that deploying one reduces the need for the other. Using a theoretical model, we show that storage capacities and transmission grids can also be complements if electricity system costs are minimized. We present the conditions that determine the kind of interdependence at specific storage locations: the characteristics of transmission congestion and the alignment of marginal generation costs between adjacent regions. By applying our theoretical insights to Italian power system data, we obtain empirical evidence that storage and transmission can act as either substitutes or complements. Planners of long-lasting and costly infrastructure can use the results to avoid design errors such as a misplacement of storage within the system.
Subjects: 
power grid
energy system
infrastructure planning
energy transition
JEL: 
C61
D24
L94
Q41
Q42
Document Type: 
Working Paper

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