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# VII.c Storage, demand shifting, interconnection Costs

## Technologies costed in this sector

Excluded are costs of shifting demand for electric cars. Note hydrogen storage is also not considered here because this was not used to derive our technical assumptions on storage capacity.

## Costs Methodology

### Methodology used

This section of the Calculator is slightly different from the other sectors in that it calculates the consequences on electricity grid balancing of all the other low carbon choices made in the Calculator. The methodology used is to model a stress test and then calculate the CCGT back up generation required once the options chosen by the user of interconnector, pumped hydro storage, battery/compressed air storage and demand shifting from electric cars are exhausted. The stress test chosen is a 5 day cold snap where intermittent renewables output is only a fraction of average output and heating demand increases significantly. For full technical assumptions please see our latest analytical report.[1]

The cost calculated in this section is therefore the cost of back up, storage and interconnection of the electricity grid to ensure supply and demand is balanced during peak demand and reduced supply.

Please see 2050 Methodology for a full description of the costs approach in the Calculator.

### Methodology issues and questions to stakeholders

• We have assumed demand shifting from electric cars would be largely a potential welfare loss, either achieved through pricing incentives or regulation but would not be a resource cost. Are there any resource costs associated with demand shifting?
• Are there any other demand side responses from the technologies assumed in the Calculator that could reduce demand? Do they have a resource cost?

## Technical Assumptions

### Gas standby generation

Life - MottMac10 suggests a 20 to 30 year operating life. Because of the very low utilisation if it is as a dedicated standby plant, we assume that any built 2010 to 2050 will last beyond 2050 (e.g., up to 40 year life).

### Pumped Storage

Size - 1.8 GW [2] Life - Assume these last beyond 2050 [3] Operation - For the variable component of the operating cost: arbitrarily assume that the pumped storage completely discharges once a week (52 times a year).