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Energy Storage and Renewable Energy: An Economic Approach

Year 2018, Volume: 4 Issue: 1, 15 - 38, 31.05.2018

Abstract

Bu makalede, fosil yakıtlar ve değişken yenilenebilir
enerji kaynaklarıyla enerji üretiminin yapıldığı, ve üretilen enerjinin enerji
depolama sistemleri aracılığıyla depolanabildiği bir ekonomi göz önünde
bulundurulmaktadır. Bu kurgu dahilinde, enerji depolamanın optimal olduğu
durumlar belirlenmekte, ve ekonomi-enerji değişkenlerinin uzun dönemdeki eğilimleri
analiz edilmektedir. Ulaşılan sonuçlar iki yönlüdür. İlk olarak, ekonomide
depolanan enerji miktarı talep ve arz eğrilerinin biçimleriyle büyük oranda
ilişkilidir. Özellikle, marjinal fayda eğrisindeki konveksite, fosil enerji
marjinal maliyet eğrisindeki konveksite, ve yenilenebilir enerji üretimindeki
değişkenliğin büyüklüğü enerjinin depolanmasını teşvik etmektedirler. İkinci olarak,
yenilenebilir enerji kapasitesinin düşük ve fosil yakıtlar kullanılarak
üretilen enerjinin birimi maliyetinin sabit olduğu durumlarda, enerjinin
depolanması refah artışı sağlamamaktadır. Enerji depolamanın enerji üretim
kararlarına olan etkisini gösteren bu çalışmanın, enerji-ekonomi modellerini
kullanarak yapılacak yeni çalışmalarda enerji arzının daha genel bir biçimde
ele alınabilmesine olanak sağlayabileceği düşünülmektedir.

References

  • Ambec, S. and C. Crampes (2012). Electricity provision with intermittent sources of energy. Resource and Energy Economics 34 (3), 319–336.
  • Bobtcheff, C. (2011). Optimal dynamic management of a renewable energy source under uncertainty. Annals of Economics and Statistics/Annales d’Économie et de Statistique (103- 104), 143–172.
  • Bunn, D. W., C. Day, and K. Vlahos (2000). Understanding latent market power in the electricity pool of england and wales. In Pricing in Competitive Electricity Markets, pp. 103–125. Springer.
  • Crampes, C. and M. Moreaux (2001). Water resource and power generation. International Journal of Industrial Organization 19 (6), 975–997.
  • Crampes, C. and M. Moreaux (2010). Pumped storage and cost saving. Energy Economics 32 (2), 325–333.
  • EIA (2011). International Energy Outlook 2011. Technical report, U.S. Energy Information Administration.
  • Evans, L., G. Guthrie, and A. Lu (2013). The role of storage in a competitive electricity market and the effects of climate change. Energy Economics 36, 405–418.
  • Førsund, F. R. (2007). Hydropower Economics. Springer, New York, USA.
  • Førsund, F. R. (2012). Pumped-storage hydroelectricty. CREE Working paper (14).
  • Førsund, F. R. and L. Hjalmarsson (2011). Renewable energy expansion and the value of balance regulation power. Modern Cost-benefit Analysis of Hydropower Conflicts. Edward Elgar Publishing , 97–126.
  • Heal, G. (2009). Climate economics: a meta-review and some suggestions for future research. Review of Environmental Economics and Policy 3 (1), 4–21.
  • Helm, C. and M. Mier (2016). Efficient diffusion of renewable energies: A roller-coaster ride. Oldenburg Discussion Papers in Economics 289 (16), 4–21.
  • IEA (2014). Technology Roadmap: Energy Storage. Technical report, International Energy Agency.
  • IPCC (2013). Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Technical report, IPCC, Cambridge, United Kingdom and New York, NY, USA.
  • Joskow, P. L. (2011). Comparing the costs of intermittent and dispatchable electricity generating technologies. American Economic Review 101 (3), 238–241.
  • Judd, K. L. (1992). Projection methods for solving aggregate growth models. Journal of Economic Theory, 58, 410–452.
  • Judd, K. L. (1998). Numerical Methods in Economics. Yhe MIT Press, Massachusetts, London, England.
  • Kaldellis, J., A. Gkikaki, E. Kaldelli, and M. Kapsali (2012). Investigating the energy autonomy of very small non-interconnected islands: A case study: Agathonisi, Greece. Energy for Sustainable Development 16 (4), 476–485.
  • Kanakasabapathy, P. (2013). Economic impact of pumped storage power plant on social welfare of electricity market. Electrical Power and Energy Systems 45, 187–193.
  • Kimball, M. S. (1990). Precautionary saving in the small and in the large. Econometrica, 53–73.
  • Koopmans, T. C. (1958). Water storage policy in a simplified hydroelectric system. Cowles Foundation for Research in Economics at Yale University.
  • Korpaas, M., A. T. Holena, and R. Hildrumb (2003). Operation and sizing of energy storage for wind power plants in a market system. Electrical Power and Energy Systems 25, 559–606.
  • Leland, H. E. (1968). Saving and uncertainty: The precautionary demand for saving. The Quarterly Journal of Economics 82 (3), 465–473.
  • Miranda, M. J. and P. L. Fackler (2002). Applied Computational Economics and Finance. MIT Press.
  • Mueller, S., P. Frankl, and K. Sadamori (2016). Next generation wind and solar power from cost to value. International Energy Agency: Paris, France.
  • Sandmo, A. (1970). The effect of uncertainty on saving decisions. The Review of Economic Studies , 353–360.
  • Stokey, N. L. (1989). Recursive Methods in Economic Dynamics. Harvard University Press.
  • Tsitsiklis, J. N. and Y. Xu (2015). Pricing of fluctuations in electricity markets. European Journal of Operational Research 246 (1), 199–208.
  • Tuohy, A. and M. O’Malley (2011). Pumped storage in systems with very high wind penetration. Energy Policy 39 (4), 1965–1974.
  • Van de Ven, P., N. Hegde, L. Massoulie, and T. Salonidis (2011). Optimal control of residential energy storage under price fluctuations. In ENERGY 2011, The First International Conference on Smart Grids, Green Communications and IT Energy-aware Technologies, pp. 159–162.
  • Wolak, F. A. (2003). Identification and estimation of cost functions using observed bid data. In Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress, Volume 2, pp. 133. Cambridge University Press.

Energy Storage and Renewable Energy: An Economic Approach

Year 2018, Volume: 4 Issue: 1, 15 - 38, 31.05.2018

Abstract

I consider an economy with fossil fuels, intermittent
renewable energy, and energy storage, identify the conditions under which
energy storage is optimal, and analyze the long-run tendencies of the economy
energy variables. The findings are twofold. First, the amount of energy stored
in the economy is highly dependent on the shape of the demand and supply
schedules. In particular, energy storage is fostered by the convexity of the
marginal utility, the marginal cost function for fossil fuel energy, and the
degree of volatility in renewable energy. Second, considering a low level of
renewable energy capacity, storing energy is not welfare improving when the
unit cost of providing fossil fuel energy is constant. By showing the influence
that energy storage can have on energy generation decisions, I believe that the
current work can be influential in a more generous treatment of energy supply
in future energy-economy models.

References

  • Ambec, S. and C. Crampes (2012). Electricity provision with intermittent sources of energy. Resource and Energy Economics 34 (3), 319–336.
  • Bobtcheff, C. (2011). Optimal dynamic management of a renewable energy source under uncertainty. Annals of Economics and Statistics/Annales d’Économie et de Statistique (103- 104), 143–172.
  • Bunn, D. W., C. Day, and K. Vlahos (2000). Understanding latent market power in the electricity pool of england and wales. In Pricing in Competitive Electricity Markets, pp. 103–125. Springer.
  • Crampes, C. and M. Moreaux (2001). Water resource and power generation. International Journal of Industrial Organization 19 (6), 975–997.
  • Crampes, C. and M. Moreaux (2010). Pumped storage and cost saving. Energy Economics 32 (2), 325–333.
  • EIA (2011). International Energy Outlook 2011. Technical report, U.S. Energy Information Administration.
  • Evans, L., G. Guthrie, and A. Lu (2013). The role of storage in a competitive electricity market and the effects of climate change. Energy Economics 36, 405–418.
  • Førsund, F. R. (2007). Hydropower Economics. Springer, New York, USA.
  • Førsund, F. R. (2012). Pumped-storage hydroelectricty. CREE Working paper (14).
  • Førsund, F. R. and L. Hjalmarsson (2011). Renewable energy expansion and the value of balance regulation power. Modern Cost-benefit Analysis of Hydropower Conflicts. Edward Elgar Publishing , 97–126.
  • Heal, G. (2009). Climate economics: a meta-review and some suggestions for future research. Review of Environmental Economics and Policy 3 (1), 4–21.
  • Helm, C. and M. Mier (2016). Efficient diffusion of renewable energies: A roller-coaster ride. Oldenburg Discussion Papers in Economics 289 (16), 4–21.
  • IEA (2014). Technology Roadmap: Energy Storage. Technical report, International Energy Agency.
  • IPCC (2013). Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Technical report, IPCC, Cambridge, United Kingdom and New York, NY, USA.
  • Joskow, P. L. (2011). Comparing the costs of intermittent and dispatchable electricity generating technologies. American Economic Review 101 (3), 238–241.
  • Judd, K. L. (1992). Projection methods for solving aggregate growth models. Journal of Economic Theory, 58, 410–452.
  • Judd, K. L. (1998). Numerical Methods in Economics. Yhe MIT Press, Massachusetts, London, England.
  • Kaldellis, J., A. Gkikaki, E. Kaldelli, and M. Kapsali (2012). Investigating the energy autonomy of very small non-interconnected islands: A case study: Agathonisi, Greece. Energy for Sustainable Development 16 (4), 476–485.
  • Kanakasabapathy, P. (2013). Economic impact of pumped storage power plant on social welfare of electricity market. Electrical Power and Energy Systems 45, 187–193.
  • Kimball, M. S. (1990). Precautionary saving in the small and in the large. Econometrica, 53–73.
  • Koopmans, T. C. (1958). Water storage policy in a simplified hydroelectric system. Cowles Foundation for Research in Economics at Yale University.
  • Korpaas, M., A. T. Holena, and R. Hildrumb (2003). Operation and sizing of energy storage for wind power plants in a market system. Electrical Power and Energy Systems 25, 559–606.
  • Leland, H. E. (1968). Saving and uncertainty: The precautionary demand for saving. The Quarterly Journal of Economics 82 (3), 465–473.
  • Miranda, M. J. and P. L. Fackler (2002). Applied Computational Economics and Finance. MIT Press.
  • Mueller, S., P. Frankl, and K. Sadamori (2016). Next generation wind and solar power from cost to value. International Energy Agency: Paris, France.
  • Sandmo, A. (1970). The effect of uncertainty on saving decisions. The Review of Economic Studies , 353–360.
  • Stokey, N. L. (1989). Recursive Methods in Economic Dynamics. Harvard University Press.
  • Tsitsiklis, J. N. and Y. Xu (2015). Pricing of fluctuations in electricity markets. European Journal of Operational Research 246 (1), 199–208.
  • Tuohy, A. and M. O’Malley (2011). Pumped storage in systems with very high wind penetration. Energy Policy 39 (4), 1965–1974.
  • Van de Ven, P., N. Hegde, L. Massoulie, and T. Salonidis (2011). Optimal control of residential energy storage under price fluctuations. In ENERGY 2011, The First International Conference on Smart Grids, Green Communications and IT Energy-aware Technologies, pp. 159–162.
  • Wolak, F. A. (2003). Identification and estimation of cost functions using observed bid data. In Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress, Volume 2, pp. 133. Cambridge University Press.
There are 31 citations in total.

Details

Primary Language English
Journal Section Makaleler
Authors

Tunç Durmaz 0000-0001-5693-3350

Publication Date May 31, 2018
Published in Issue Year 2018 Volume: 4 Issue: 1

Cite

APA Durmaz, T. (2018). Energy Storage and Renewable Energy: An Economic Approach. Yildiz Social Science Review, 4(1), 15-38.