The future role of Carnot batteries in Central Europe: Combining energy system and market perspective

Power generation from variable renewable energies is expected to dominate the future energy supply in many countries, which will lead to an increased demand for flexibility options. Carnot batteries offer the technical prerequisites for meeting this flexibility demand and are relatively easy to scale. This paper investigates the future economic potential for Carnot batteries by coupling the energy systems optimization model REMix and the agent-based electricity market model AMIRIS. While REMix evaluates the least-cost infrastructure configuration of the energy system and the role of Carnot batteries in it, AMIRIS focuses on the corresponding profitability of these storage systems. The modelling chain is applied in a case study of a zero-emission energy system in Central Europe for the year 2050. To provide guidance for a promising technology development, a parameter scan for costs and efficiencies of Carnot batteries is performed for this system. We find that from an energy system design perspective the availability of a low-cost storage medium is a key driver for the usage of Carnot batteries. In addition, the combination of Carnot batteries with wind energy provides benefits due to the possibility of longer storage durations compared to electrochemical battery systems. Carnot battery operators can potentially realize positive annual gross profits, based on factors such as the system's design, their designated role within the energy system, and notably, their market power and bidding strategy. We conclude that the development potential of Carnot batteries must be leveraged to make them competitive with other storage technologies on a broader scale. •Coupling of energy system optimization and electricity market simulation model•European analysis of competing flexibility options in zero-emission scenario•Low-cost storage medium main driver for integration of Carnot batteries•Synergies between Carnot batteries and feed-in from wind energy•Profitability of storage dependent on market environment and bidding strategy