Market impacts of energy storage in a transmission-constrained power system

Vilma Virasjoki, Paula Rocha, Afzal S. Siddiqui, Ahti Salo

Research output: Contribution to journalArticleScientificpeer-review

31 Citations (Scopus)


Environmental concerns have motivated governments in the European Union and elsewhere to set ambitious targets for generation from renewable energy (RE) technologies and to offer subsidies for their adoption along with priority grid access. However, because RE technologies like solar and wind power are intermittent, their penetration places greater strain on existing conventional power plants that need to ramp up more often. In turn, energy storage technologies, e.g., pumped hydro storage or compressed air storage, are proposed to offset the intermittency of RE technologies and to facilitate their integration into the grid. We assess the economic and environmental consequences of storage via a complementarity model of a stylized Western European power system with market power, representation of the transmission grid, and uncertainty in RE output. Although storage helps to reduce congestion and ramping costs, it may actually increase greenhouse gas emissions from conventional power plants in a perfectly competitive setting. Conversely, strategic use of storage by producers renders it less effective at curbing both congestion and ramping costs, while having no net overall impact on emissions.

Original languageEnglish
Article number7331337
Pages (from-to)4108-4117
Number of pages10
JournalIEEE Transactions on Power Systems
Issue number5
Publication statusPublished - 1 Sep 2016
MoE publication typeA1 Journal article-refereed


  • Complementarity modeling
  • energy storage
  • wind power


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