arXiv subjects

Adam Suski

Publications and source records attributed to Adam Suski.

4 recordsLinked to original sources

arXiv2026

Contracting for Long-Duration Energy Storage in Incomplete Risk Markets

Long-duration energy storage (LDES) is increasingly regarded as essential for reliability in decarbonized power systems. To encourage investment, policymakers introduce contracts, such as cap-and-floor schemes. So far, these schemes have only been evaluated using exogenous revenue or price distributions. This paper develops a two-stage stochastic equilibrium model to evaluate how LDES cap-and-floor design affects investment and market outcomes. This model endogenously captures the interactions among contract design, investment capacity, and cost of capital. Results for a stylized Great Britain case study show that market incompleteness substantially suppresses LDES investment. Centrally administered zero-premium contracts can restore the risk-neutral investment level by reducing downside risk, but doing so requires substantial expected transfers from consumers to investors and produces outcomes that are sensitive to the cap, floor, and sharing parameters. Bilaterally negotiated contracts largely eliminate expected transfers and reduce sensitivity to those parameters, but provide weaker investment incentives. To balance investment incentives, transfers, and social welfare, policymakers should jointly consider contract and institutional design.

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arXiv2026

Comparing Contract-Based Support Mechanisms for Long-Duration Energy Storage

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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arXiv2025

Quantifying the Impact of Missing Risk Markets for Decarbonized Power Systems with Long Duration Energy Storage

The transition to a fully decarbonised electricity system depends on integrating new technologies that ensure reliability alongside sustainability. However, missing risk markets hinder investment in reliability-enhancing technologies by exposing investors to revenue uncertainty. This study provides the first quantitative assessment of how missing risk markets affect investment decisions in power systems that depend on long-duration energy storage (LDES) for reliability. We develop a two-stage stochastic equilibrium model with risk-averse market participants, which independently sizes power and energy capacity. We apply the method to a case study of a deeply decarbonised power system in Great Britain. The results show that incomplete risk markets reduce social welfare, harm reliability, and discourage investment in LDES and other technologies with volatile revenue streams. Revenue volatility leads to substantial risk premiums and higher financing costs for LDES, creating a barrier to its large-scale deployment. These findings demonstrate the importance of policy mechanisms that hedge revenue risk to lower the cost of capital and accelerate investment in reliability-enhancing, zero-carbon technologies

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arXiv2025

Missing Money and Market-Based Adequacy in Deeply Decarbonized Power Systems with Long-Duration Energy Storage

The ability of deeply decarbonised power systems to ensure adequacy may increasingly depend on long-duration energy storage (LDES). A central challenge is whether capacity markets (CMs), originally designed around thermal generation, can provide efficient investment signals when storage becomes a central participant. While recent studies have advanced methods for accrediting variable renewables and short-duration storage, the effectiveness of these methods in CMs with substantial LDES penetration remains largely unexplored. To address this gap, we extend a two-stage stochastic equilibrium investment model by endogenising continuous, duration-based capacity accreditation for storage and apply it to a Great Britain-based case using 40 years of weather-driven demand and renewable profiles under varying emission limits. Results show that well-calibrated CMs can sustain near-efficient investment and mitigate revenue volatility, but their effectiveness diminishes in deeply decarbonized systems, underscoring both their potential and the regulatory challenges of supporting large-scale LDES.

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