Feasibility of Pumped Storage Hydropower With Existing Pricing Policy in Turkey

Abstract

Pumped-storage hydroelectricity (PSH) has been used worldwide as a means of energy storage for many years. Unlike many countries with pumped storage, Turkey has not needed a PSH facility until very recently since the existing hydropower plants with large reservoirs provided the required flexibility to meet daily demand variations. The share of renewable energy in Turkey's electrical grid has significantly increased in the last decade. Moreover, the first nuclear power plant of the country is planned to start operating in 2023, reducing the hydropower share. All of these combined have begun to bring forth the need for energy storage and PSH. On the other hand, the high investment costs of PSH and present electricity pricing policy raises questions about the profitability of a projected PSH facility. In this paper, the Godkcekaya PSH project is selected as a case study to determine the profitability of a PSH implementation in Turkey considering probable operation scenarios based on hourly prices without any reference to environmental issues to highlight the consequences of pricing policy on storage schemes. Evaluations are made using real-time electricity prices and generation-consumption values through the perspective of both the public and private sectors. Results show that the current prices in the Turkish electricity market are not profitable enough for potential PSH projects to attract investment by the private sector.