Missing money and market-based adequacy in deeply decarbonized power systems with long-duration energy storage
Author(s)
Suski, Adam
Spyrou, Elina
Green, Richard
Type
Journal Article
Abstract
The ability of deeply decarbonized power systems to ensure adequacy may increasingly depend on long-duration energy storage (LDES). A central challenge is whether capacity markets (CMs), originally designed around thermal generation, can provide efficient investment signals when storage becomes a central participant. While recent studies have advanced methods for accrediting variable renewables and short-duration storage, the effectiveness of these methods in CMs with substantial LDES penetration remains largely unexplored. To address this gap, we extend a two-stage stochastic equilibrium investment model by endogenizing continuous, duration-based capacity accreditation for storage and apply it to a Great Britain-based case using 40 years of weather-driven demand and renewable profiles under varying emission limits. Results show that well-calibrated CMs can sustain near-efficient investment and mitigate revenue volatility, but their effectiveness diminishes in deeply decarbonized systems, underscoring both their potential and the regulatory challenges of supporting large-scale LDES.
Date Issued
2025-12-26
Date Acceptance
2025-12-01
Citation
IEEE Transactions on Energy Markets, Policy and Regulation, 2025
ISSN
2771-9626
Publisher
Institute of Electrical and Electronics Engineers
Journal / Book Title
IEEE Transactions on Energy Markets, Policy and Regulation
Copyright Statement
Copyright © 2025 IEEE. This is the author’s accepted manuscript made available under a CC-BY licence in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy)
License URL
Publication Status
Published online
Date Publish Online
2025-12-26