THE IMPACT OF DAY-AHEAD ELECTRICITY PRICES ON THE COST-EFFECTIVENESS OF POSSIBLE PUMPED HYDRO ENERGY STORAGE FACILITY IN SERBIA

Deregulation in power industry, electricity market liberalisation, tendency towards Europe-wide market coupling, and renewable energy sources (RES) incentives and expansion, became of the crucial influence on wholesale electricity prices. Besides, introduction of CO2 taxes additionally increased electricity prices in total, but – on the other side – reduced the profit of the fossil fuels-based thermal power plants. To fulfil the proscribed requirements, very expensive systems for pollution prevention must be applied, too. As an alternative to that, investments in hydro sector should be considered. Opposite to hydro capacities' long-term construction and exploitation, stand the fluctuations of day-ahead electricity prices, influencing strongly to both these facilities' operation schedule and incomes. To investigate that issue, hourly and daily prices in the regional market were analysed. Day-ahead wholesale electricity prices' trends have been established. The relevant values have been determined and used as one of the input data sets for cost-benefit and sensitivity analyses of the case study, “Bistrica“ pumped hydro energy storage (PHES) power plant. The impact of day-ahead electricity prices fluctuations has been emphasised here. The goal of this research was to draw a conclusion if these prices' trends steer in favour of the construction of possible PHES facilities in Serbia.