Abstract
The increase penetration of renewable energy sources (RES) into the European power system has introduced a significant amount of variability and uncertainty in the generation profiles raising the needs for ancillary services as well as other tools like demand response, improved generation forecasting techniques and changes to the market design. While RES is able to replace energy produced by the traditional centralized generation, it cannot displace its capacity in terms of ancillary services provided. Therefore, centralized generation capacity must be retained to perform this function leading to over-capacity issues and underutilisation of the assets. Large-scale reversible hydro power plants represent the majority of the storage solution installed in the power system. This technology comes with high investments costs, hence the constant search for methods to increase and diversify the sources of revenue. Traditional fixed speed pump storage units typically operate in the day-ahead market to perform price arbitrage and, in some specific cases, provide downward replacement reserve (RR). Variable speed pump storage can not only participate in RR but also contribute to FRR, given their ability to control its operating point in pumping mode. This work does an extended analysis of a complete bidding strategy for Pumped Storage Power, enhancing the economic advantages of variable speed pump units in comparison with fixed ones.
Highlights
Reversible hydro power plants with reservoir (Pumped Storage Power - PSP) are the most mature storage technology with high integration levels in countries such as Portugal, Spain and Switzerland
The fixed speed PSP participate in the day-ahead (DA) electricity market for price arbitrage and provision of downward replacement reserve (RR) in specific cases
Since frequency restoration reserve (FRR) remuneration is made in two fractions, reserve band and energy activated, it is necessary to estimate the latest based on the ratio of the overall energy used and the total amount of FRR reserve contracted, detailed in (2) for the upward activation but the same method is applied to downward
Summary
Reversible hydro power plants with reservoir (Pumped Storage Power - PSP) are the most mature storage technology with high integration levels in countries such as Portugal, Spain and Switzerland. The fixed speed PSP participate in the day-ahead (DA) electricity market for price arbitrage (i.e., pump in low price periods and generate in high price periods) and provision of downward replacement reserve (RR) in specific cases.
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