Power System Decarbonization: Impacts of Energy Storage Duration and Interannual Renewables Variability

TL;DR

This study examines how energy storage duration and interannual renewable variability influence power system decarbonization, highlighting the importance of multi-year data for robust planning and the limited role of CCS in 2050.

Contribution

It provides a comprehensive capacity expansion analysis of Italy’s power system considering ESS duration and interannual VRE variability, emphasizing multi-year data use for better robustness.

Findings

Longer ESS durations have diminishing marginal value.

Interannual VRE variability significantly impacts system design and costs.

Single-year data leads to higher operational costs in other years.

Abstract

Decarbonization of the electricity sector is one of the major measures in slowing down the pace of climate change. In this paper, we analyze the impacts of energy storage systems (ESS) and interannual uncertainty of variable renewable energy (VRE) on power system decarbonization in 2050. We perform capacity expansion optimization based on technology cost projections and CO2 emission restrictions using 11 years of VRE and load data in Italy's power system, with a particular focus on the role of ESS and its duration. We also explore capacity expansion optimization based on multiple-year vs. single-year data to quantify the impact of VRE interannual variability. Our results indicate high renewables penetration even in the absence of decarbonization policies. In the transition to zero carbon system, CCS plays a minor role due to its carbon capture efficiency. ESS investments contribute to lower system costs by replacing more expensive flexibility resources. However, longer ESS durations have lower marginal value per added kWh ESS. Interannual variability of VRE substantially changes the system's configuration and energy cost. Decision-making based on single-year data substantially increases the systems' operational costs in other years. In contrast, optimizing over multiple years provides a more robust and cost effective generation expansion strategy.