High energy capacity or high power rating: Which is the more important performance metric for battery energy storage systems at different penetrations of variable renewables?

Studies exploring the role and value of energy storage in deep decarbonization often overlook the balance between the energy capacity and the power rating of storage systems—a key performance parameter that can affect every part of storage operation. Here, we quantitatively evaluate the system-wide impacts of battery storage systems with various energy-to-power ratios (EPRs) and at different levels of renewable penetration. We take Jiangsu province in China as our case study, due to its high electricity consumption and aggressive renewable energy targets. Our results show the evolving role of storage: as renewable penetration increases, higher EPRs are favored, as they lead to system-wide cost reductions, lower GHG emissions, and higher power system reliability. Whereas existing studies make exogenous assumptions about the lifetime of storage, we show that lifetimes across EPRs and renewable scenarios span 10 to 20 years. Existing research can thus send false signals to investors and grid planners, delaying the deployment of storage and retarding the energy transition. By showing how different EPRs yield different benefits at different stages of the energy transition, our results help investors, policy makers, and system planners design forward-thinking and dynamic policies that encourage prudent storage uptake.