The Economics of Bulk Electricity Storage with Intermittent Renewables

• Environmental and Resource Economics Workshop

Date and Location

Friday, October 5, 2012, 12:10 PM - 1:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

Efforts to reduce air pollution from the electricity sector are driving a shift towards intermittent, renewable sources. Motivated largely by the belief that electricity storage technologies are a vital complement to these intermittent renewables, policymakers have begun implementing requirements that will dramatically increase the amount of bulk storage capacity. This paper analytically and empirically demonstrates that, in contrast to the environmental objectives of expanding renewables, adding bulk storage capacity will often increase air pollution. In addition, contrary to the view that storage and renewables are necessarily complements, storage is shown to make certain renewables (e.g., solar) less attractive.