Economic analysis of large-scale pumped storage plants in Norway

Abstract

The European power system needs to develop mechanisms to compensate for the reduced predictability and high variability that occur when integrating renewable energy. Construction of pumped storage plant (PSP) is a solution. In this article an economic analysis of large-scale PSP in Norway is made considering sales of energy. The analysis is carried out with a power market model and a 2030 projection of the Northern Europe power system. The effect of varying the PSP capacity and transmission capacity between Norway and Europe is studied. A substantial increase in transmission capacity from Norway to Europe is needed for PSP to be profitable for the owners and the Scandinavian socio-economic surplus. 14100 MW transmission capacities and 950 MW new PSP capacity give the highest socio-economic surplus in this analyse, which increase by 800 M€/year compared with expected 2030 capacity on transmission and PSP.