Pumped Hydro and Compressed Air Energy Storage at High Wind Penetrations

Energy storage is a widely used tool for balancing power systems and for providing increased operational flexibility - as such it can assist with the integration of variable renewable electricity generation. Grid-scale energy storage provides potential solutions to some of the technical and economic challenges which arise in systems with high penetrations of variable renewables, particularly on isolated systems. However, capital costs per MW are high, which means that variable renewable penetrations must reach significant levels before the operating cost reductions justify the capital expenditure. Optimum levels of grid-scale storage are explored, considering capital costs and potential operational cost savings for two storage technologies - pumped hydroelectric storage and compressed air energy storage. Grid-scale installations are found to achieve significant cost savings, particularly at high levels of wind generation. While the potential for savings is eroded significantly at high levels of DC interconnection, they remain high when non-synchronous penetration limits are increased.