Valuation of pumped storage in capacity expansion planning – a South African case study

According to the South African Integrated Resource Plan more flexible generation will be required to integrate the increased variable renewable energy generation and this will be provided by gas turbines and batteries. More studies need to be done to verify whether a renewables, gas/diesel and battery mix will provide the energy security South Africa currently obtains from base load stations. Supplementary reactive power and additional inertia may be needed to ensure system stability with the addition of high proportions of non-synchronous PV and wind generators. Pumped Storage can alleviate this issue as it is another form of flexible generation with fast ramping capacity, stored energy, and system inertia to provide security and stability to the grid. This paper investigates why Pumped Storage (PS) was not included in the future plan, and highlights potential issues with the modelling of PS in the current long-term energy planning model. The paper investigates the services and contributions of PS on the South African grid and makes recommendations for ancillary services costs to be included in the modeling methodology. The paper further highlights the uncertainty in technology costings and the impact thereof through sensitivity analyses using levelized cost of energy curves for pumped storage, gas turbines and batteries. Correctly valuing pumped storage and the ancillary services the technology provides is vital to accurately modelling the technology in long term energy planning models.