Cost-sharing mechanisms for pumped storage plants at different market stages in China

Bingying Tian, Yongxiu He, Jinghan Zhou, Bingwen Wang, Yi Wang and Wenran Shi

Renewable Energy, 2023, vol. 217, issue C

Abstract: In the context of the construction of new power system, the installed scale of energy storage is steadily increasing in order to deal with the problem of safe and reliable operation of the system resulting from a large proportion of renewable energy installations connected to the grid. The pumped storage plants (PSP) have peak shaving, frequency modulation and standby functions which play a major role in ensuring the safety of the system and the consumption of renewable energy. By analysing the evolution of the pricing mechanism of transmission and distribution (T&D) tariffs and PSP, this paper analyses the influencing factors of PSP on T&D tariffs under different stages of electricity market development and establishes a conduction model. The empirical analysis shows that as the electricity market improves, the costs that PSP need to conduct through T&D tariffs continue to decrease. Therefore, it is necessary to accelerate the construction of the electricity market and to reflect the value of PSP through market regulation, in order to enable the PSP to recover part of their fixed capacity costs without relying on T&D tariffs, and to gradually achieve self-profitability.

Keywords: Pumped storage plants; Transmission and distribution tariffs; Analysis of influencing factors; Cost conduction mechanism (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:217:y:2023:i:c:s0960148123010984

DOI: 10.1016/j.renene.2023.119183

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