Energy storage technology is one of the critical supporting technologies to achieve carbon neutrality target. However, the investment in energy storage technology in China faces policy and other uncer.
What is the value of energy storage technology?
Specifically, with an expected growth rate of 0, when the volatility rises from 0.1 to 0.2, the critical value of the investment in energy storage technology rises from 0.0757 USD/kWh to 0.1019 USD/kWh, which is more pronounced. In addition, the value of the investment option also rises from 72.8 USD to 147.7 USD, which is also more apparent.
What is the investment opportunity value of energy storage technology?
A firm choosing to invest in energy storage technology is equivalent to executing the value of the investment option . In this study, the investment opportunity value of an energy storage technology is denoted by F (P), that is, the maximum expected net present value when a firm invests in an energy storage technology.
By solving for the investment threshold and investment opportunity value under various uncertainties and different strategies, the optimal investment scheme can be obtained. Finally, to verify the validity of the model, it is applied to investment decisions for energy storage participation in China's peaking auxiliary service market.
Additionally, the investment threshold is significantly lower under the single strategy than it is under the continuous strategy. Therefore, direct investment in future energy storage technologies is the best choice when new technologies are already available.
Therefore, increasing the technology innovation level, as indicated by unit benefit coefficient, can promote energy storage technology investment. On the other hand, reducing the unit investment cost can mainly increase the investment opportunity value.
While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.