Norwegian pumped hydro for providing peaking power in a low-carbon European power market — Cost comparison against OCGT and CCGT

This paper presents an analysis of the cost of providing peak generation from new OCGT, CCGT and Norwegian pumped hydro plants in a European power system with high penetration of wind and solar power. A method for calculation of the Levelized Cost of Peak Generation (LCPG) is proposed, which builds on the well-established metric Levelized Cost of Electricity (LCOE). Results from a case study shows that building new reversible pumping stations between existing reservoirs in the Norwegian hydro system are economical advantageous over new CCGT and OCGT plants in Northern Europe, taking into account additional costs of subsea cables across the North Sea and corresponding reinforcements of the mainland grid. The study also shows the importance of giving interconnectors access to capacity markets across borders to obtain as low cost as possible for firm capacity in a future European system dominated by variable renewable production.