This paper develops an economic theory of optimal grid-scale electricity storage for three distinct applications, referred to as 'supply-side storage,' 'nodal storage', and 'demand-side storage.' Traditionally, grid-scale electricity storage was the exclusive domain of pumped hydro. The...

What happens to the merit order of electricity markets when all electricity is supplied by intermittent renewable energy sources coupled with large-scale electricity storage? With near-zero marginal cost of production, will there still be a role for an energy-only electricity market? We answer...

As electricity generation from intermittent energy sources (wind, solar, tides) is gaining momentum, it becomes increasingly important to price these electricity sources efficiently. Conventional flat feed-in-tariffs ignore the heterogeneity of these sources. Taking into account the degree of...