Working Papers

  • Pairing Batteries with Renewables: How Ownership Shapes Operational Incentives and Market Outcomes (download here)

    This paper examines how battery storage ownership structure affects wholesale electricity market outcomes by shaping operational incentives. Using a dynamic dispatch model calibrated to Texas data, I show how transmission congestion creates conditions in which batteries operated jointly with a renewable plant are used strategically to increase the value of renewable production. The strength of this incentive depends on supply elasticity and the timing of renewable production. Co-owned batteries earn roughly 76 percent higher profits than standalone batteries in markets where strategic incentives arise. Despite this strategic behavior, co-owned and standalone batteries produce similar effects on consumer surplus, renewable curtailment, and carbon emission costs. While market conditions do not generate enough profits for battery investment to be viable—regardless of ownership—the positive effects on consumer surplus and carbon emissions make batteries desirable from consumers' perspective. Under a uniform subsidy policy, co-ownership's higher profitability makes more batteries viable at moderate subsidy rates.

Work in Progress

  • Estimating the Curtailment-Mitigating Role of Battery Energy Storage Systems

    The rapid expansion of variable renewable energy (VRE) in Texas—reaching 27 GW of solar and 43 GW of wind capacity by 2024—has been accompanied by rising curtailment. When available generation exceeds transmission capacity or contemporaneous demand, grid operators must curtail zero-marginal-cost renewable output. This paper quantifies how battery energy storage systems (BESS) mitigate curtailment by absorbing surplus generation. Using hourly Texas data from 2019-2024, I exploit the staggered deployment of new battery installations to estimate the causal effect of storage on market-level curtailment. The identification strategy relies on exogenous variation in battery deployment driven by declining capital costs. I find that each additional MWh of battery capacity reduces curtailment by approximately 0.1 MWh during nighttime and early morning hours (6 PM to 8 AM), when wind generation is abundant, but has negligible effects during midday solar peak hours (9 AM to 5 PM).