Economic Analysis of Electricity Storage Based on Heat Pumps and Thermal Storage Units in Large-Scale Thermal Power Plants

Abstract

In this paper the financial viability of a novel storage concept, referred to as ‘integrated pumped-heat-electricity storage’, is assessed for both a coal-fired and a combined cycle (CC) power plant located in Germany, as well as for a concentrated solar power (CSP) plant located in Spain. The rationale of this concept is to use electricity during times of cheap wholesale market prices, e.g. stemming from a high supply of renewable energies, in order to generate thermal energy via a heat pump, since thermal energy can be stored at comparatively low cost. If the electricity demand rises again, the stored thermal energy is used to power a conventional water-steam cycle, thereby reducing the amount of fossil fuels used or enlarging the operating time of a CSP plant. A mixed integer linear program, considering the day-ahead wholesale market electricity prices and remunerations of offering tertiary control power in Germany, is employed to find an approximation of the optimal schedule for the generation in the power plant as well as for the purchase and the sale of electricity. The financial viability is assessed using net present value (NPV) and real options analysis. Storing electricity to profit from temporal arbitrage is found to be unprofitable, since the (conservatively estimated) costs of thermal storage units are still too high. The largest part of the revenues stems from the remunerations of offering tertiary control power. Therefore, while the utilization of heat pumps, which are estimated to have rather high costs, is not profitable, employing electric heaters without storage units is found to be economically viable for a coal-fired and a CC power plant in Germany. Here, NPV and real options analysis yield the same result, i.e. to invest immediately in such an application. In Spain, offering tertiary control power is presently not remunerated, but only the call-offs of tertiary control energy, which are not considered in the mixed integer linear program. Consequently, employing electric heaters in CSP plants in Spain is found to be not financially viable either.