Bulk electricity storage technologies for load-leveling operation – An economic assessment for the Austrian and German power market

•Economic analysis of bulk electricity storage technologies.•Power market with fast growing share of intermittent renewable electricity.•Pumped hydro storage plants set the economic benchmark.•New technologies require considerable cost reductions to become an alternative.•Storage plants were facing a considerable decrease in revenues in the past years.

Fast growing shares of intermittent renewable electricity have raised the interest in the economic potential of electricity storage in Europe. In this paper we analyze the economic performance of bulk electricity storage (ES) technologies for load-leveling operation in the German and Austrian power market. We assess four different power storage technologies: Pumped hydro storage (PHS), adiabatic compressed air energy storage (AA-CAES), hydrogen storage (H2) and methane storage (CH4). We examine storage revenues by simulating optimal price arbitrage based on historic price data of the years 2007–2011.The results indicate that revenues have decreased significantly during this time period and even the most efficient technology, the PHS, has fallen below the profitability margin. Alternative technologies proved to be inferior to the PHS as a day storage plant. There might be a field of application for H2 and CH4 as seasonal storage, if their costs can be reduced considerably.The results reveal that, based on the past 5 years’ development, incentives to invest in storage capacity are currently low. Given the uncertain mid- to long-term development of the power market, this could seriously delay the extension of storage capacities required for the integration of intermittent renewable electricity.