Economics of electric energy storage. The case of Western Balkans

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 euro /MWh for sodium-sulfur batteries show considerable potential for new installations, as compared to 125 euro /MWh for pumped hydro storage. (c) 2021 Elsevier Ltd. All rights reserved.

Automated summary

The Paris Agreement has influenced a new generation of renewable energy systems, impacting energy balancing costs and questioning the stability of future energy supply. This study investigates the cost-effectiveness of pumped hydro storage and large-scale battery storage systems, showing the economic justification and grid flexibility potential of pumped hydro storage compared to sodium-sulfur batteries.