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| Autori principali: | , , |
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| Natura: | Preprint |
| Pubblicazione: |
2026
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| Accesso online: | https://arxiv.org/abs/2603.13678 |
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| _version_ | 1866908885820899328 |
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| author | Shen, Daniel Ilic, Marija Parsons, John |
| author_facet | Shen, Daniel Ilic, Marija Parsons, John |
| contents | Energy storage shifts energy from off-peak periods to on-peak periods. Unlike conventional generation, storage is duration-limited: the stored energy capacity constrains the duration over which it can supply power. To understand how these constraints affect optimal pricing and investment decisions, we extend the classic two-period peak-load pricing model to include duration-limited storage. By adopting assumptions typical of solar-dominated systems, we link on- and off-peak prices to storage investment costs, round-trip efficiency, and the duration of the peak period. The bulk of the scarcity premium from on-peak prices is associated with the fixed costs of storage as opposed to variable costs stemming from round-trip efficiency losses. Unlike conventional generators, the binding duration constraints lead storage to recover energy capacity costs on a per-peak-event basis instead of amortizing these costs over total peak hours. A numerical example illustrates the implications for equilibrium prices and capacity investment. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2603_13678 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Peak-Load Pricing and Investment Cost Recovery with Duration-Limited Storage Shen, Daniel Ilic, Marija Parsons, John Systems and Control Energy storage shifts energy from off-peak periods to on-peak periods. Unlike conventional generation, storage is duration-limited: the stored energy capacity constrains the duration over which it can supply power. To understand how these constraints affect optimal pricing and investment decisions, we extend the classic two-period peak-load pricing model to include duration-limited storage. By adopting assumptions typical of solar-dominated systems, we link on- and off-peak prices to storage investment costs, round-trip efficiency, and the duration of the peak period. The bulk of the scarcity premium from on-peak prices is associated with the fixed costs of storage as opposed to variable costs stemming from round-trip efficiency losses. Unlike conventional generators, the binding duration constraints lead storage to recover energy capacity costs on a per-peak-event basis instead of amortizing these costs over total peak hours. A numerical example illustrates the implications for equilibrium prices and capacity investment. |
| title | Peak-Load Pricing and Investment Cost Recovery with Duration-Limited Storage |
| topic | Systems and Control |
| url | https://arxiv.org/abs/2603.13678 |