Lab Seminar: The Impacts of Grid-Scale Lithium-Ion Battery Investment on Wholesale Electricity Prices in California
Matt Dudek presented his work on the impact of grid-scale battery storage capacity on electricity prices in California. A key barrier to expanding renewable energy production is the daily mismatch between intermittent generation and electricity demand. For example, despite a massive expansion in the low marginal cost solar power production, electricity can only be produced from these sources when the sun is shining. Peak demand for electricity during the evening is met by natural gas turbines with higher marginal costs, increasing energy prices and emissions. Theory suggests that an increase in storage may help to reduce the temporal and spatial variability of electricity prices, and the total cost of energy. Matt proposed an empirical strategy for measuring the impact of grid-scale battery investments on local energy prices.