Design limits and investment risks of mid-term storage under uncertain market conditions

The transition to a net-zero energy system with high shares of variable renewables increases the need for flexibility beyond short-term batteries and seasonal hydrogen storage. Emerging storage technologies with discharge durations from several hours to a few days may fill this mid-term segment due to their cost structures, but their economic viability under uncertain future market conditions remains unclear. This study assesses which combinations of energy-to-power ratios (8–168 h) and round-trip efficiencies (10–100%) enable profitable and robust investments from an individual investor’s perspective, by evaluating storage configurations with an agent-based electricity market model that incorporates mean-reverting stochastic fuel prices and renewable generation. The results show that the marginal benefit of additional storage declines sharply with increasing energy-to-power ratios, increasing maximum capital expenditures by approximately 25% from 24 to 168 h. In contrast, increasing the round-trip efficiency from 40% to 60% can reduce downside risk, measured as the difference between expected contribution margin and conditional value at risk, by 5% and increase the maximum allowable capital expenditure by about 61% within the analysed cases. ... mehrConsequently, only configurations with sufficiently low energy-specific capital costs and moderate to high efficiencies remain economically competitive in the mid-term segment. This work demonstrates how balancing efficiency, costs, and storage duration drive mid-term storage competitiveness, highlighting their critical influence on performance, while introducing risk-based assessments to quantitatively evaluate a comprehensive parameter space and its impact on investment risk.