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Faculty of Economics

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Sidhu, A. and Pollitt, M. and Anaya, K.

A Social Cost Benefit Analysis of Grid-Scale Electrical Energy Storage Projects: Evaluating the Smarter Network Storage Project


Abstract: This study explores and quantifies the social costs and benefits of grid-scale electrical energy storage (EES) projects in Great Britain. The case study for this report is the Smarter Network Storage project, a 6 MW/10MWh lithium battery placed at the Leighton Buzzard Primary substation to meet growing local peak demand requirements. This study analyses both the locational and system-wide benefits to grid-scale EES, determines the realistic combination of those social benefits, and juxtaposes them against the social costs across the lifecycle of the battery to determine the techno-economic performance. Risk and uncertainty from the benefit streams, cost elements, battery lifespan, and discount rate are incorporated into a Monte Carlo simulation. Using this framework, society can be guided to cost-effectively invest in EES as a grid modernization asset to facilitate the transition to a reliable, affordable, and clean power system.

Keywords: electrical energy storage, battery, social cost benefit analysis

JEL Codes: L94 L98 Q48 D61

Author links: Michael Pollitt  


EPRG Paper Link: 1710

Open Access Link: