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|Title:||Analysis of financial mechanisms in support to new pumped hydropower storage projects in Croatia|
|Authors:||KRAJACIC Goran; LONCAR Drazen; DUIC Neven; ZELJKO Mladen; LACAL ARANTEGUI ROBERTO; SANDU-LOISEL Rodica; RAGUZIN Igor|
|Citation:||APPLIED ENERGY vol. 101 p. 161-171|
|Publisher:||ELSEVIER SCI LTD|
|Type:||Articles in periodicals and books|
|Abstract:||The variable nature of renewable energy sources (RES) such as wind, solar and waves is one of the factors limiting their higher penetration in he network. This issue has been firstly recognized in autonomous networks where RES penetration easily reached technical limits. Now, integrated power systems face similar problems when RES penetration exceeds certain levels. Effective use of energy storage could compensate for the intermittency and would increase RES penetration. Today the most widespread storage technology in power systems is the pumped or reversible hydro storage (PHS) which has many advantages and can provide multiple services in transmission, distribution and generation (e.g. support to RES integration, grid upgrade and ancillary services, load shifting etc.). It is claimed that not all services that PHS provide to the electricity system are adequately rewarded by the electricity market and thus there is a serious uncertainty on how investment costs in energy storage would be recovered. This paper analyses potential supporting schemes for pumped hydro storage facilities in Croatia, which would guarantee the investment cost recovery, with for instance feed in tariffs which would guarantee the payment for discharging wind-originated power as a reward for boosting the RES integration. The payment level acts a floor basis for the PHS operator during the decision process to contract fixed payments for wind support or to act market-free on other market segments, through price arbitrage and reserve provision. The market share required for an efficient operation of a PHS facility and the level of FIT are set mathematically by use of historical market data. Main findings state the level of FiT for an applied project in Croatia in the range 42-242 €/MWh for an average load factor of 20%, depending on particular local conditions, such as the level of wind power curtailment in the system, the power price for charging the power and the number of pumps and penstocks which could lower the capital cost. Other elements, outside the market, would influence the operation of PHS, such as the regulated level of a desirable rate of curtailment of RES power excess, the adequate level of energy security and the reserve margins which PHS could contribute to insure.|
|JRC Directorate:||Energy, Transport and Climate|
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