arXiv · 2605.18582
Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage
Abstract
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.
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Adam Suski, Elina Spyrou, Jacob Mays, Richard Green. 2026-05-18. Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage. https://arxiv.org/abs/2605.18582
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