Abstract:
This paper uses nine years of demand and weather reanalysis data to observe both the requirements of electricity storage and the prices likely to result in a 100% renewable energy system. Historical data is scaled to 2050 projections using figures provided by Transpower (2020). Shortages and surpluses are observed to understand the setting in which both battery and pumped hydro storage is required. An agent-based, short-term optimization model then predicts prices in a market with imperfect competition. It is found that lithium battery storage lacks utility due to low utilization. The high input capacity of a pumped hydro storage system allows near $0/MWh charging costs. Average margins on electricity arbitraged by the pumped hydro scheme are exceedingly high, yet high fixed costs mean that government support is likely required for the scheme to go ahead. Short and long-term electricity prices in a 100% renewable system are highly volatile by today’s standards which leave potential for hedging agreements between seasonal storage operators and consumers.
