The Low-Carbon Energy System Transition Under Alternative Storage And Hydrogen Cost Projections

As the costs of wind and solar technologies plummet and global climate change consensus grows, wind and solar development pipelines have ballooned. Analyses of future energy systems indicate that wind and solar energy could account for 35-65% of total electricity supply by 2050 and 47-86% of total electricity supply by 2100 if carbon policies are introduced (Luderer et al., 2017). However, the variable and uncertain nature of wind and solar resources makes integrating these resources into the electricity system more complicated than conventional sources of generation such as coal, nuclear, and gas.

The electricity system will have to become more flexible to be able to maintain grid balance with large contributions from wind and solar resources. Storage technologies, such as pumped hydro storage, batteries, and compressed air energy storage, are considered a critical part of providing this flexibility.  However, the future costs of storage technologies are highly uncertain, as reflected by the range of projected costs found in the literature. Future storage technology costs could significantly impact how our electricity systems evolve in the coming decades.

Integrated assessment models are often used to explore global energy-economic-environmental scenarios over multi-decade time periods, particularly to identify energy transformation pathways for climate change mitigation. Such models consider cost and performance trade-offs between alternative energy supply options and end-use technologies to provide insight into energy systems development trends. Typically, integrated assessment models assume a fixed cost trajectory for storage technologies, and analyses ignore the impacts that storage technology costs might have on the energy system transformation and climate change mitigation. This study presents the first use of a globally-integrated assessment model to assess the sensitivity of future wind and solar deployments, and the electricity system more broadly, to uncertainties in the future cost of storage and hydrogen technologies.

In this study, we added techno-economic representations of electric storage and hydrogen technologies, including batteries, pumped hydro storage, compressed air energy storage, and hydrogen electrolysis to the well-cited MESSAGE model. We then ran a range of scenarios with different storage and hydrogen technology cost assumptions and explored the impacts on the electricity system evolution. The results show that large-scale storage deployment only occurs when techno-economic assumptions are optimistic. In a carbon-constrained world with high storage and hydrogen costs, wind and solar resources are integrated via flexible, low-carbon technologies such as hydrogen combustion turbines and concentrating solar power with solar thermal storage. However, this view of the future increases the cost of the energy system transition and carbon mitigation significantly. In the absence of a carbon policy, pessimistic hydrogen and storage techno-economic assumptions reduce VRE deployment and increase coal-based electricity generation.

Low-cost storage and hydrogen technologies are important in a carbon-constrained world to minimize mitigation costs, as well as in a carbon-unconstrained world to facilitate variable renewable energy integration and mitigate coal generation. In either carbon policy case, large-scale storage deployment only occurs when techno-economic assumptions are optimistic. R&D investments that produce cost breakthroughs for storage and hydrogen technologies are an important component of the low-carbon energy transition.

These findings are discussed in the article entitled, The role of electricity storage and hydrogen technologies in enabling global low-carbon energy transitions, recently published in the journal Applied Energy. This work was conducted by Madeleine McPherson from the University of Toronto and Nils Johnson and Manfred Strubegger from the International Institute for Applied Systems Analysis.


  1. Luderer, G., Pietzcker, R. C., Carrara, S., de Boer, H. S., Fujimori, S., Johnson, N., … Arent, D. (2017). Assessment of wind and solar power in global low-carbon energy scenarios: An introduction. Energy Economics, 64, 542–551.

About The Author

Madeleine McPherson

I lead the Sustainable Energy Systems Integration and Transitions (SESIT) Group at the University of Victoria. Our group research focuses on energy systems integration – the process of coordinating the operation and planning of our energy systems over a variety of spatial-temporal scales and infrastructure systems (transport, buildings, electricity, water). This work involves the development and application of energy system software, designed to address research and policy questions related to variable renewable energy integration, demand response initiatives, utility-scale and behind-the-meter storage technologies, and electric vehicle integration. We use a range of approaches including optimization and machine intelligence techniques to gain insights into the sustainable energy system transformation. My research interests include:

  • Representing grid-edge actors and their interaction with the energy system
  • Integrating the transport, power, buildings and water systems
  • Developing a spatially and temporally broad perspective of our energy system
Nils Johnson

Nils Johnson’s main research interest is spatially-explicit modeling of sustainable energy transitions under long-term socio-economic and climatic change. His research combines techno-economic analysis, optimization, and geographic information systems (GIS) to explore how energy systems will need to transform to both mitigate and adapt to climate change. He has extensive experience with both spatially-explicit and global energy systems modeling and is currently developing a next-generation spatially-explicit energy systems model for evaluating how fine resolution phenomena, such as water resource constraints, might impact long-term energy transitions. He is one of the chief architects of the Integrated Solutions for Water, Energy, and Land (IS-WEL) project and is leading the development of the energy module of a new nexus assessment framework for identifying sustainable solutions for meeting the future water, energy, and land demands of both human and natural systems.

Dr. Johnson graduated with a doctorate in transportation technology and policy from the University of California, Davis (USA), Institute of Transportation Studies, in 2012. He also holds a Master of Forestry and Master of Environmental Management from the Nicholas School of the Environment at Duke University (USA), where he specialized in landscape ecology and geographic information systems (GIS).

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