Simulating business models for electricity storage
Electricity storage systems (ESS) are hailed by many scholars and practitioners as a key element of future electricity systems and a key step toward the transition to a renewable energy system. However, the global speed of ESS implementation is relatively slow. There are several reasons for the slow rate of ESS deployment, one of them is the lack of viable business models.
This dissertation suggests a way to study the design of business models for ESS from different actors’ perspectives in the Dutch electricity sector given several complexities and deep uncertainties. We follow a step-by-step design framework, and adopt literature review and data analysis methods in order to set goals, objectives, and constraints; and we develop a design space. Then, we combine agent-based modelling (ABM) and exploratory modelling analysis (EMA) approaches to test ESS business models incorporating several complexities and uncertainties. Our experiments focus mostly on extreme conditions.
Our results show that ESS is not profitable in most scenarios. The results also show that generally, a “wholesale arbitrage” business model leads to more profit than “reserve capacity”. In addition, we found that in the scenarios with an extremely high share of electricity generation from renewable sources, ESS is not necessarily profitable. Besides, we found that more implementation of ESS does not necessarily reduce the average profit for ESS projects. Finally, we explain that improving technologies is expected to improve the desirability of ESS more than government intervention.