On the Profitability of Variable Speed Pump-Storage-Power in Frequency Restoration Reserve

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.