Thread by @WonkTheWalk

🚨New paper alert!🚨#energytwitter
In the absence of a price on carbon, the operation of grid-scale energy storage tends to increase GHG emissions, not decrease them. We propose a market rule to mitigate this effect: an Emissions Neutrality Constraint.
ieeexplore.ieee.org/document/88448…

First, why does energy storage tend to increase GHG emissions? Plenty of work has already been done on this topic (see R. Sioshansi and @ElephantEating for some examples), but the gist is that it's most profitable to charge with coal power and discharge to displace natural gas.

As the penetration of renewables increases, this negative effect will decrease and eventually flip (see the work of @TheEnergyCraig), but for now the beneficial effect of soaking up excess renewables is outweighed by the negative effect of coal->gas fuel switching.

So, what do we do? We investigate what happens if the operation of energy storage is constrained to be emissions-neutral at worst: our Emissions Neutrality Constraint. This is similar to the CPUC's efforts to reform their incentives for energy storage based on GHG performance.

This operational constraint may impact investment in energy storage, so we formulate three storage investment problems (differing based on the investor's objectives/constraints) with a lower-level energy market with and without this Emissions Neutrality Constraint (ENC).

We find that although the ENC can decrease overall storage investment and increase overall cost, the beneficial effect on reducing emissions was much greater: emissions reductions were 30-50x greater than cost increases, so overall abatement costs were on the order of $1/ton.

When there IS a price on carbon (even as low as $10/ton), the detrimental emissions effect of storage tends to disappear as the coal→gas arbitrage becomes unprofitable. But if we can't price carbon, an ENC provides a good substitute policy to mitigate storage emissions impacts.

We also study a very-high renewables system (~45% by energy) and find that although the overall effect of storage on emissions is beneficial, a daily ENC still has significant emissions benefits, since storage would still increase emissions on some days (and decrease on others).

For those of you without IEEE journal access, a pre-print is available at: arxiv.org/abs/1909.11034