Chair for Management Science and Energy Economics Prof. Dr. Christoph Weber Chair for Management Science and Energy Economics University of Duisburg‐Essen EWL Working Paper No. 07/2011 PROSPECTS FOR PUMPED‐HYDRO STORAGE IN GERMANY by Bjarne Steffen December 2011 Prospects for pumped‐hydro storage in Germany by Bjarne Steffen Abstract After a period of hibernation, the development of pumped‐hydro storage plants in Germany regains momentum. Motivated by an ever increasing share of intermittent renewable generation, a variety of energy players considers new projects, which could increase the available capacity by up to 60% until the end of the decade. This paper analyzes the current development and evaluates the revenue potential as well as possible barriers. Overall, the prospects for new pumped‐hydro storage plants have improved, even though profitability remains a major challenge. Keywords: pumped‐hydro energy storage, power plant investment, Germany JEL‐Classification: L94, Q42, Q48 DIPL.‐VOLKSW. BJARNE STEFFEN Chair for Management Sciences and Energy Economics, University of Duisburg‐Essen (Campus Essen) Universitätsstr. 11, 45117 Essen ++49 ‐ (0)2 01 / 183‐2399 www.ewl.wiwi.uni‐due.de
[email protected] The authors are solely responsible for the contents which do not necessarily represent the opinion of the Chair for Management Sciences and Energy Economics. 1 Introduction With increasing shares of power generation from renewable energy sources, the possibility to balance uctuating wind and solar power gains in importance. Both on the European and national levels, energy policy therefore strives to increase the number of storage plants (EC, 2007; BMWi, 2010). This is especially true for Germany which decided to quickly phase-out nuclear generation following the Fukushima accident.