An empirical analysis of optimal energy storage system capacity for renewable energy supply: A case study of the European Union

A critical challenge in the power sector of the massive deployment of variable renewable energy such as solar photovoltaics and wind power, and a large increase in overall electricity demand as more end uses are electrified. Grid-scale energy storage, the most widely used technology is pumped-storage hydropower (PSH), will be essential to manage the impact on the power grid and handle the hourly and seasonal variations in renewable electricity output while keeping grids stable and reliable. This study used the panel threshold regression model to examine the threshold effect of the proportion of energy storage for the development of renewable energy. The energy import dependence and energy market concentration are also both taken into account in the model. The empirical results show that when the amount of PSH is below/above the threshold, its β coefficient shows the opposing results of positive/negative correlation, respectively. It is increasingly important to focus on the power system operations in the planning models integrating variable renewables, the power system planning models are conducted to future power structure scenarios, and need to provide the rolling wave planning models with increasing variable renewables.