On the displacement of incumbent electricity storage by more efficient storage in a stylized market model

The future power supply is expected to rely on a broad mix of flexibility options. Understanding their systemic interactions is crucial to maximize their benefit. This study investigates the interactions of storage types performing energy time-shifting with different round-trip efficiencies. For this purpose, a novel framework is used, defining highly stylized models approximating a cost-optimizing market: This approach represents the power system's operation during four time slots. While this simplicity inhibits direct statements on real-world systems, it provides insights into the mechanisms at play. Interactions are discussed based on closed-form mathematical expressions (rather than numerical results): The presented solutions correspond to the system's endogenous variables (notably charging and discharging power) as functions of the input parameters (load profiles, storage efficiency, etc.). This approach identifies a broad variety of potential storage interactions. They critically depend on the system's residual load profile and storage capacities. It is found that the storage displacement can go both ways: It is not necessarily the case that more efficient storage unconditionally displaces less efficient storage. Further, the emergence of temporal symmetries of storage operation is a recurring theme in the discussion: It translates to caveats when modeling systems with multiple flexibility types.