Long-term Impacts of Energy Storage Providing Regulation on Power Plant Retirements and System Emissions

Abstract

Energy storage can provide a variety of economic and reliability benefits to the grid; however, the overall environmental impacts of storage are not always positive, as some studies have shown. In this paper, we explore the long-term impacts of using storage to provide frequency regulation. Specifically, using an optimization model that co-optimizes unit commitment, energy, and regulation capacity, we explore the effect of increasing penetrations of regulation-providing storage on dispatch, prices, profit, retirements, and long-term system-wide CO2 emissions. We also investigate how the impacts change when retired generators are replaced by renewables. We find that storage can lead to increases or decreases in emissions, depending on system parameters and whether renewables replace retired capacity. Additionally, we find that long-term impacts can be in different directions than short-term impacts. This points to the need for new mechanisms to ensure desired environmental outcomes are achieved when using so-called "green" technologies.