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An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage

Lookup NU author(s): Harold Anuta, Professor Phil Taylor, Dr Neal WadeORCiD



This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).


Energy storage systems (ESS) have the potential to make a significant contribution to planning and operation practises in power systems. While ESS can be used to provide multiple benefits in the power sector, widespread use has been restricted by high technology costs, lack of deployment experience, and the barriers and uncertainties caused by the present electricity market and regulatory structures that were designed for conventional electricity systems. This paper reviews countries with high renewable targets and with significant current or planned ESS deployments to ascertain the common problems affecting the use of ESS on the grid, and to establish where changes have been made or proposed to the electricity market and regulatory frameworks. Three major problems were identified as the undetermined asset class for ESS and unbundled electricity system limiting stakeholders from determining and realising multiple ESS benefits; low electricity market liquidity and changing market conditions; and a lack of common standards and procedures for evaluating, connecting, operating and maintaining ESS. Based on the established barriers, recommendations to update or create policies, regulation and market arrangements to increase the viability and wider use of grid level ESS are discussed. The three key regulatory and policy recommendations were identified as an alignment of renewable policies to that of ESS; creating a separate asset class for ESS and associated rules for regulated and competitive operations; and standardising assessment frameworks, connection and operational procedures for the use of ESS. Finally, three main electricity market recommendations include updating rules to support simultaneous ESS operation across wholesale, ancillary services and capacity markets; updating market rules to allow compensation for flexible and highly accurate responsive demand and generation technologies, such as ESS; and updating market ancillary services energy requirements.

Publication metadata

Author(s): Anuta OH, Taylor PC, Jones D, McEntee T, Wade NS

Publication type: Article

Publication status: Published

Journal: Renewable and Sustainable Energy Reviews

Year: 2014

Volume: 38

Pages: 489-508

Print publication date: 01/10/2014

Online publication date: 11/07/2014

Acceptance date: 18/06/2014

Date deposited: 23/07/2014

ISSN (print): 1364-0321

ISSN (electronic): 1879-0690

Publisher: Elsevier


DOI: 10.1016/j.rser.2014.06.006


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