EURO 2024 Copenhagen
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983. Analysis and Mitigation of Unintended Carbon Emissions from Storage and Demand Response.

Invited abstract in session MD-22: Energy transition and operations, stream Energy Management.

Monday, 14:30-16:00
Room: 81 (building: 116)

Authors (first author is the speaker)

1. Olga Kuryatnikova
Erasmus University Rotterdam
2. Clarisse Dupont
Rotterdam School of Management, Erasmus University Rotterdam
3. Yashar Ghiassi-Farrokhfal
Rotterdam School of Management , Erasmus University Rotterdam
4. Derek Bunn
London Business School

Abstract

Storage and demand response could provide necessary flexibility to accommodate the influx of intermittent renewable energy and facilitate the low carbon energy transition. However, the operation of these flexible assets may inadvertently intensify carbon emissions, leading to a conflict between profit maximization and environmental impact. We develop a model to characterize the factors causing this effect. Essentially, both storage and demand response act as load-shifting agents (LSAs), and therefore, they indirectly influence emissions. The scope of this influence depends upon the carbon intensity profile of the supply function in the wholesale market and the round-trip efficiency of LSAs. Some of the insights are surprising, e.g., the more efficient LSAs do not always lead to lower carbon emissions. Next, we propose and analyze several policy instruments aimed at reducing the unintended emissions caused by LSAs. Finally, using data from the Dutch market, we simulate the impact of LSAs and the emission mitigation instruments. We find that in 2019, simply adding LSAs to the market would reduce the total carbon emission. Conversely, in 2022, some LSAs, such as pumped hydro storage and lithium-ion batteries, would increase the emission if no CO2 mitigation instruments were applied.

Keywords

Status: accepted

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