Profit analysis of energy storage and hydroelectric power in port of spain

How much does hydropower cost in Spain?

Hydropower units charged 69% of the prices above €500/MWh. Hydro reservoir levels do not explain high marginal prices. From January 2021 to March 2022, wholesale Spanish spot electricity prices reached a record high of €700/MWh. Surprisingly, hydropower set the marginal market price for 52% of the hours in 2021 and 43% in the first quarter of 2022.

What are the strategic decisions in the Spanish hydro sector?

The hydro sector includes run-of-river and dam-based plants, with an installed capacity of 17,095 MW in 2021, representing 15% of the Spanish market capacity. 2 Therefore, the strategic decisions are about when hydro plants should produce energy or stay idle.

How much electricity is traded in Spain in 2021?

For instance, in 2021, the total volume traded in the Spanish electricity market was 248.2 TWh, of which 176.5 TWh (71%) corresponds to the spot market and 71.7 TWh (29%) to bilateral contracts, OMIE (2021). The spot market is a sequential marginalist market, consisting of a day-ahead market auction followed by six intraday market auctions.

What is the current situation in the Spanish electricity sector?

The current situation in the Spanish electricity sector can be explained by its structure. Most of the capacity is concentrated among the three largest firms, with 80% of the non-wind and 60% of the wind capacity owned by them. The hydropower sector has around 800 hydroelectric power plants of various sizes.

Does Spain have a high voltage shore-to-ship power system?

Historically, Spain has installed several Low Voltage (LV) shore-to-ship power systems which indicates that a significant market of High Voltage (HV) systems is addressable which is evident from the chart below:

How do CCGT units affect electricity prices in Spain?

In the Spanish market, the marginal costs of CCGT units depended on natural gas and carbon prices. If these prices increase, the marginal costs of CCGT units should also rise, leading to higher marginal electricity prices, primarily set by CCGT units. However, the empirical findings did not align with this explanation.