Akademik Məlumat İdarəetmə Sistemi
Journal of Energy Storage, vol.118, 2025 (SCI-Expanded)
As the global energy sector transitions toward sustainability, integrating variable renewable energy sources (VRES) such as wind and solar power poses challenges due to their intermittent nature. Energy storage systems (ESS) are essential for mitigating these fluctuations by storing excess energy and discharging it during peak demand. This study explores how market structure and investor incentives influence ESS deployment through a bi-level optimization model. The hypothesis suggests that market competition has a greater impact on optimal storage investments than investor objectives, as consumer welfare gains often exceed those of investors. The model contrasts a welfare-maximizing entity with a profit-driven independent investor while incorporating Cournot oligopoly and perfect competition market dynamics. A numerical case study based on the Western European power market reveals that under perfect competition, ESS investments increase social welfare by €7.06 million, reducing grid costs and benefiting consumers, while in Cournot oligopoly conditions, the welfare gain is significantly lower at only €0.68 million. Moreover, strategic investments in France, Belgium, and Germany (300 MWh) lead to a 4 % reduction in grid revenue, demonstrating the influence of storage on market efficiency. Results indicate that market power distorts ESS investments, potentially leading to suboptimal or excessive expenditures, reinforcing the need for regulatory measures. The findings emphasize that policymakers must align private investment incentives with societal welfare objectives through targeted subsidies, competition frameworks, and market regulations to ensure ESS investments enhance grid stability, renewable integration, and consumer benefits.