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Policy and Regulation for Energy Storage Systems

Author

Listed:
  • Miguel Vazquez
  • Matteo di Castelnuovo
Abstract
We analyze the changes in the regulation of electricity systems required to adapt to the presence of energy storage. To that end, we begin by identifying different types of services provided by storage. As services have different economic properties, the economic mechanisms required to organize them will be different as well. There are two relevant “arenas” for storage services: i) buy and sell energy in different periods (including energy related to ancillary services); and ii) avoid the need to transport energy from one point to another, i.e. the need to use transmission and/or distribution networks. Consequently, this involves two kinds of regulatory challenges, because storage compete with different types of services. The first regulatory challenge is related to wholesale market design, because flexibility services can be sold in “competitive” wholesale markets (energy, ancillary services, etc.). The second regulatory challenge has to do with the regulation of energy networks, because storage services may avoid the use of “regulated” networks. Consequently, network rules should allow them to compete in a technologically neutral manner.

Suggested Citation

  • Miguel Vazquez & Matteo di Castelnuovo, 2018. "Policy and Regulation for Energy Storage Systems," IEFE Working Papers 106, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:bcu:iefewp:iefewp106
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    File URL: https://repec.unibocconi.it/iefe/bcu/papers/iefewp106.pdf
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    References listed on IDEAS

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    Cited by:

    1. Diezmartínez, C.V., 2021. "Clean energy transition in Mexico: Policy recommendations for the deployment of energy storage technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).

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    More about this item

    Keywords

    Energy Storage Systems; Market Design; Network Regulation;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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