Storage and demand response contribution to firm capacity: analysis of the Spanish electricity system

Abstract

Provision of firm capacity will become a challenge in power systems dominated by renewable generation. This paper analyses the competitiveness and role of battery storage, 6 types of pumped-hydro storage, open cycle gas turbine (OCGT) and DR technologies in providing the firm capacity required to guarantee the security of supply in a real-size power system such as the Spanish one in horizon 2030. The paper contributes with detailed and realistic modeling of the DR capabilities. Demand is disaggregated by sector and activities and projected towards 2030 applying a growth rate by activity. The load flexibility constraints are taken into account to ensure the validity of the results. A generation planning and expansion model, SPLODER, is conveniently upgraded to properly represent the different storage alternatives addressed in the paper. The results highlight the importance of considering demand response for evaluating long-term firm capacity requirements, showing a non-negligible impact on the investment decisions not only on the amount of firm capacity required in the system but also on the optimal shares of wind and solar PV renewable generation. Results also show the dominance of cost-competitiveness of hydro pumping and OCGTs over batteries. Additionally, capacity payments are required to support firm capacity providers’ investments.