Practical Experiences from Application of a Comprehensive Simulator for Pumped Storage Hydropower Investment Decisions on a Real Investment Case

The future electricity system is expected to include a higher share of production from renewable energy sources. This will lead to increased price volatility and thus a higher demand for short-term balancing by hydropower systems, which will have to operate closer to their maximum flexibility limits. In order to perform an investment analysis it is thus important to model physical characteristics and limitations of hydropower systems as close to reality as possible. A simulator based on medium- and short-term hydropower modelling is used to carry out an investment analysis for a Norwegian hydropower producer. The results demonstrate how detailed modelling can provide new insight into the implications of short-term effects in pumped storage hydropower investment decisions.