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Market Requirements for Pumped Storage Profitability: Expected Costs and Modelled Price Arbitrage Revenues, Including a Case Study of Juktan
Uppsala University, Disciplinary Domain of Science and Technology, Technology, Department of Engineering Sciences, Electricity.
2013 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

The rapid integration of intermittent renewable energy sources (IRES) has caused a growing demand for power system flexibility on energy markets all over Europe.

Being the only commercially proven large scale energy storage technology, pumped storage hydro power (PSHP) has by several studies been suggested as an efficient solution to miti­gate the impact of IRES. However, despite the perceived technical demand profit­ability remains as a major obstacle for PSHP development.

In this study, a market requirement for PSHP profitability, defined in terms of price volatility, is pre­sented. Considering capital and operational expenditures as well as modelled potential price arbitrage revenues for a greenfield PSHP plant, it may be used as a tool for initial assessments of PSHP profitability in relation to market outlooks or modelled future prices. The results have further been used in a case study, where the price volatility required to motivate a restora­tion of the now decommissioned Swedish PSHP plant Juktan has been determined.

The results show that the high capital expenditures characterising PSHP development do comprise in a high risk for developers; while feasibility depends on the sustainment of a highly volatile price climate during several decades, energy markets are often extremely uncertain.

Place, publisher, year, edition, pages
2013. , 63 p.
UPTEC ES, ISSN 1650-8300 ; 13032
Keyword [en]
energy storage, pumped storage hydro power, price arbitrage, intermittent integration, price volatility, market requirements
Keyword [sv]
Energilager, pumpkraft, prisarbitrage, integrering av intermittent generering, marknadsförutsättningar, prisvolatilitet, lönsamhet
National Category
Energy Systems
URN: urn:nbn:se:uu:diva-210136OAI: diva2:661286
Educational program
Master Programme in Energy Systems Engineering
Available from: 2013-12-09 Created: 2013-11-01 Last updated: 2013-12-09Bibliographically approved

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