Storage and Renewable Energies: Friends or Foes?

Decarbonising the power sector requires investments in renewable energy and storage. Although often viewed as complements, these technologies can also act as strategic substitutes. When renewable output coincides with high demand, storage may reduce renewable profits, and vice-versa. When renewable technologies produce at different times, storage can benefit one technology while disadvantaging the other. These findings suggest that, in solar-dominated systems, an initial push for solar may be needed before storage and renewables become reinforcing. Simulations of the Spanish electricity market confirm that, at high solar penetration, storage increases solar profitability but lowers wind revenues.