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Economics of electric energy storage. The case of Western Balkans

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  • Topalović, Zejneba
  • Haas, Reinhard
  • Ajanović, Amela
  • Hiesl, Albert

Abstract

Paris Agreement has influenced a higher generation of renewable systems that impact energy balancing costs and question future energy supply stability. Energy storage could be the key component for efficient power systems transition from fossil fuels to renewable sources. The core objective of this paper is to investigate the cost-effectiveness of pumped hydro storage and large-scale battery storage systems. This paper provides prospects for pumped hydro storage installation in comparison to battery storage with an overview of installed capacities in the Western Balkan countries due to renewed interest in already installed pumped hydro plants. The method of approach is based on an economic assessment of the different types of storage depending on capital-recovery-factors for the capital costs, life cycle costs, full load hours, the price spread of electricity in the day-ahead markets, and Levelized costs of energy storage. Sensitivity analysis of the market prices is conducted. The major results of these investigations show the economic justification of pumped hydro storage systems implementation, their role in grid flexibility, and their influence on electricity market competitiveness. Levelized storage costs of 339 €/MWh for sodium-sulfur batteries show considerable potential for new installations, as compared to 125 €/MWh for pumped hydro storage.

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  • Topalović, Zejneba & Haas, Reinhard & Ajanović, Amela & Hiesl, Albert, 2022. "Economics of electric energy storage. The case of Western Balkans," Energy, Elsevier, vol. 238(PA).
    • Handle: RePEc:eee:energy:v:238:y:2022:i:pa:s0360544221019174
    DOI: 10.1016/j.energy.2021.121669
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    1. Unggul Priyadi & Eko Atmadji & Listya Endang Artiani & Shahrina Md Nordin & Muhammad Ridhuan Tony Lim Abdullah & Mochamad Ali Imron & Muhammad Alkirom Wildan & Rohayu Che Omar, 2022. "Sustainable Energy Economic Policy: Population, Energy Consumption, and Macroeconomic Conditions," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 80-85, November.
    2. Reinhard Haas & Claudia Kemfert & Hans Auer & Amela Ajanovic & Marlene Sayer & Albert Hiesl, 2022. "On the economics of storage for electricity: Current state and future market design prospects," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(3), May.
    3. Mahfoud, Rabea Jamil & Alkayem, Nizar Faisal & Zhang, Yuquan & Zheng, Yuan & Sun, Yonghui & Alhelou, Hassan Haes, 2023. "Optimal operation of pumped hydro storage-based energy systems: A compendium of current challenges and future perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 178(C).

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