Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage
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arXiv
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| Hauptverfasser: | , , , |
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| Format: | Preprint |
| Veröffentlicht: |
2026
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| author | Suski, Adam Spyrou, Elina Mays, Jacob Green, Richard |
| author_facet | Suski, Adam Spyrou, Elina Mays, Jacob Green, Richard |
| contents | Long-duration energy storage (LDES) faces significant revenue volatility that impedes investment. This paper evaluates four contract-based support mechanisms using an equilibrium model with risk-averse investors and incomplete risk markets. Applied to a stylized 2035 Great Britain case, we find that all mechanisms can achieve the targeted LDES capacity but differ substantially in cost-effectiveness and risk-aversion sensitivity. Contracts that eliminate revenue volatility achieve the lowest costs but may weaken operational incentives, while contracts that preserve market exposure maintain incentives at higher costs. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2605_18582 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage Suski, Adam Spyrou, Elina Mays, Jacob Green, Richard Systems and Control Long-duration energy storage (LDES) faces significant revenue volatility that impedes investment. This paper evaluates four contract-based support mechanisms using an equilibrium model with risk-averse investors and incomplete risk markets. Applied to a stylized 2035 Great Britain case, we find that all mechanisms can achieve the targeted LDES capacity but differ substantially in cost-effectiveness and risk-aversion sensitivity. Contracts that eliminate revenue volatility achieve the lowest costs but may weaken operational incentives, while contracts that preserve market exposure maintain incentives at higher costs. |
| title | Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage |
| topic | Systems and Control |
| url | https://arxiv.org/abs/2605.18582 |