Options
2023
Master Thesis
Titel
Market Perspectives for an Innovative Pumped Hydro Energy Storage System
Abstract
The importance of efficient, cost-effective and sustainable energy storage technologies
for the electricity grid is paramount at a time when renewable energies are becoming
increasingly prevalent. One innovative concept is StEnSea (Stored Energy in the Sea),
which is being developed by the Fraunhofer Institute for Energy Economics and Energy
System Technology (Fraunhofer IEE). The offshore energy storage technology uses the
water pressure in the deep sea to store electrical energy, similar to pumped hydro energy
storage (PHES) and offers a scalable and practical approach.
Previous economic analyses have mainly focused on the electricity market and concluded
that StEnSea was not profitable if only arbitrage trading was considered. The main
objective of the research was to assess the profitability and market potential of StEnSea,
particularly in light of the recent increase in electricity prices and volatility since 2021.
The research extends to the examination of different market strategies for StEnSea. A
particular focus was on their application in both the electricity and balancing markets, in
particular the automatic frequency restoration reserve (aFRR) and the frequency
containment reserve (FCR). Using a techno-economic analysis framework and
developing models to simulate arbitrage, FCR and aFRR market participation, the
viability of StEnSea was assessed retrospectively using German market data from January
2019 to October 2023. The analysis concludes that StEnSea can be economically viable in the context of recent
electricity price increases and market volatility. Several scenarios, including both
arbitrage trading and participation in the aFRR and FCR balancing markets, showed
profitability when considering the profits from 2023 and the average over all years
analyzed. In particular, the combination of aFRR and arbitrage was profitable and resulted
in positive annuities for StEnSea in every year considered.
ThesisNote
Kassel, Univ., Master Thesis, 2023
Author(s)