Role and value of hydro and pumped storage generation in a proposed regional electricity market in Southeast Europe

It is recognized that hydro generation and pumped storage hydro can play a unique role in the operation of modern power systems. As part of the introduction of a regional electricity market for the Balkans region, a study was made to identify the role of hydro and pumped storage in a market based regional electricity market. The study included an analysis of the hydrologic conditions in individual countries as well as for the region. The results of the hydrologic analysis determined that the region could be simulated for three hydrologic conditions; wet, normal and dry. A power system simulation was made for year 2005 and the results used to quantify the value of hydro. The power system simulation determined cost of energy at designated nodes in a regional electricity market. Cost of energy and ancillary services were calculated. The value of hydro and pumped storage is shown in comparisons of energy costs for wet, normal and dry hydrologic conditions. The results of the power system simulation provided dispatch scenarios that can be used to evaluate the impact on the regional transmission system and to further define the role of hydro and pumped storage generation in the regional electricity market.