The energy market is evolving, with a prediction of heavily increased consumption and, consequently, increased production. In parallel, EU directives with targets prioritising fossil-free electricity production, reduction of greenhouse gas emissions and becoming climate neutral by 2050, poses a challenge for the current state of electricity production in the Nordics. In managing these predictions, the electricity production from renewable energy sources is required to be increased threefold by 2045. Consequently, the share of intermittent energy sources is deemed to heavily increase, resulting in need of more capacity of energy storage, ancillary services and balancing of the grid. Energy storage systems, such as pumped storage hydropower, can play a crucial role in this energy market transition. However, pumped storage hydropower has yet to be fully explored or proven viable for large-scale investments in the Nordics. In this thesis, the viability and profitability of pumped storage hydropower plants in the Nordics are investigated. The viability assessment was conducted through a SWOT analysis based on a summary of literature and interviews within a PESTLE framework. The interviewees consisted of experts active in different fields of work at Fortum, with knowledge relevant for the purpose of this thesis. To assess the profitability, an investment analysis tool for pumped storage hydropower plants was created in MathWork’s MATLAB, focusing on one of Fortum’s already existing pumped storage hydropower plants. The investment analysis tool was built for several cases with fixed operating schedules using a weekly timeframe.  Through the SWOT analysis, potential challenges for pumped storage hydropower were found in investment costs, topology dependence, development of nuclear power production and increased difficulty in obtaining greenfield permits. Regarding opportunities, Fortum’s pumped storage hydropower plants were found to be favourably and strategically located in SE3, beneficial in generating income from different revenue streams as well as highly beneficial in assisting the development of Sweden’s future energy market. The results obtained from the investment analysis tool indicated that market volatility plays a crucial role in determining the profitability of pumped storage hydropower projects. In a highly volatile market, there is a great possibility to yield large amounts of profit. However, to fully maximise profit, especially in a low volatility market, constant optimisation of pumped storage hydropower operations through advanced forecasting and modelling is crucial.

The 2050 national energy scenarios as planned by the DECC, academia and industry specify a range of different decarbonised supply side technologies combined with the electrification of transportation and heating. Little attention is paid to the household demand side; indeed within many scenarios a high degree of domestic Demand Side Management (DSM) is implicit if the National Grid is to maintain supply-demand balance. A top-down, bottom-up hybrid model named Shed-able Household Energy Demand (SHED) has been developed and the results of which presented within this thesis. SHED models six published national energy scenarios, including three from the Department for Energy and Climate Change, in order to provide a broad coverage of the possible energy scenario landscape. The objective of which is to quantify the required changes in current household energy demand patterns via DSM, as are implicit under these highly electricity dominated scenarios, in order to maintain electrical supply-demand balance at the national level. The frequency and magnitude of these required household DSM responses is quantified. SHED performs this by modelling eleven years of supply-demand dynamics on the hourly time step, based on the assumptions of the published energy scenarios as well as weather data from around 150 weather stations around the UK and National Grid historic electricity demand data. The bottom-up component of SHED is populated by 1,000 households hourly gas and electricity demand data from a recently released dataset from a smart metering trial in Ireland. This aggregate pool of households enables national domestic DSM dynamics to be disaggregated to the aggregate household level. Using household classifications developed by the Office for National Statistics three typical ' households are identified within the aggregate pool and algorithms developed to investigate the possible required responses from these three households. SHED is the first model of its kind to connect national energy scenarios to the implications these scenarios may have on households consumption of energy at a high temporal resolution. The analysis of the top-down scenario modelling shows significant periods where electrical demand exceeds supply within all scenarios, within many scenarios instances exist where the deficit is unserviceable due to lack of sufficient spare capacity either side of the deficit period. Considering the level of participation required within the modelled scenarios in order to balance the electricity system and the current lack in understanding of smart metering and Time-Of-Use (TOU) tariffs within households, it would seem there is a disconnect between the electricity system being planned, the role this system expects of households and the role households are willing to play.

The share of intermittent weather-based renewable electricity sources has risen and will keep on rising in the Nordic electricity system, which will increase the need of balancing power in the Nordics. The previously developed concept of balancing contributions is used to look at the historic contribution of different power sources to the balancing on the grid. Three different time scales are taken into account: Daily variations, (bi-)weekly variations, and seasonal/yearly variations. This will aid in the understanding of the synergy of different sources on the grid, which, together with a deeper knowledge of the electricity market, might make it possible in the future to quantify the potential for balancing of sources within the Nordic grid. As a method to analyse the balancing contributions, a previously set-up online visualisation tool was used as an example, and this existing tool was revamped with a new software back-end using a database and automatic data collection. This allows one to be able to use a larger dataset, and for more functionality in the future, such as real-time updates and easier implementation of additional visualisations. Production and consumption data was gathered from Entso-e and SvK: the former has issues with data quality and the latter publishes data with a three-week delay which can only be obtained manually. The results from the previous research have been replicated, and a bigger dataset has been used to do the calculations, encompassing the years 2015-2018. The overall results show great similarity to that of the previous work. For the first time it was possible to plot the intrayear balancing contributions as a time series, which showed especially that the contributions of hydro power and electricity trade have changed over the period 2015-2018. There is a difference in hydro power balancing contributions based on geographical location, where Finnish hydro power is mainly a daily and—to a lesser extent—weekly regulator, Swedish hydro and especially Norwegian hydro have larger contributions on a yearly basis as well. There are even differences within countries, as the balancing contribution of hydro in bidding area SE2 has changed much more over time than hydro in SE1, for example. Other examples of interesting situations on the grid have also been highlighted using the online visualisation tool.

Dans un contexte de croissance démographique dans lequel certaines ressources naturelles sont de plus en plus limitées, une gestion optimisée et conjointe des réseaux publics de l’eau et de l’électricité s’impose. L’ouverture progressive des marchés de l’électricité à la concurrence et les changements de réglementation dans plusieurs pays ont contribué au développement des mécanismes de la flexibilité de la demande, permettant d’impliquer directement les consommateurs dans la gestion de l’équilibre offre-demande du réseau électrique. Les systèmes d’eau potable, étant de grands consommateurs d’électricité, disposent d’une flexibilité grâce à la présence d’ouvrages de stockage d’eau (bâches et réservoirs) et de pompes à vitesse variable. Cette flexibilité, souvent exploitée uniquement à des fins de sécurisation des demandes en eau, peut être valorisée pour permettre une meilleure gestion de l’équilibre du réseau électrique. L’objectif de cette thèse est l’évaluation des valeurs économiques et écologiques relatives à l’intégration de la flexibilité des systèmes d’eau potable dans la gestion opérationnelle du système électrique français. Une étude de l’architecture des marchés de l’électricité en France est d’abord menée pour identifier les mécanismes de flexibilité de la demande les plus adaptés aux contraintes d’exploitation des systèmes d’eau. Des modèles mathématiques d’optimisation sont ensuite proposés et résolus à travers certaines heuristiques, en intégrant les incertitudes relatives aux consommations d’eau, aux prix des marchés ainsi qu’à la disponibilité des équipements de pompage. Les résultats numériques, discutés en se basant sur trois systèmes d’eau potable réels en France, intègrent les aspects économiques (en considérant les risques associés), opérationnels et écologiques. Des réductions importantes des coûts d’exploitation des systèmes d’eau sont estimées à travers la valorisation de l’énergie non consommée pendant les moments de pointe sur le marché spot de l’électricité. En parallèle, la considération des incertitudes permet de sécuriser l’opération des systèmes d’eau en temps réel, et de maîtriser les risques économiques relatifs à l’équilibrage du réseau électrique. De plus, des réductions importantes des émissions de CO2, estimées à environ 400 tonnes par jour en France, peuvent être réalisées en réduisant les volumes d’électricité issus des sources fossiles. / In a context of demographic growth in which natural resources are more and more limited, optimized management of water and power networks is required. Changes in electricity markets regulation in several countries have recently enabled effective integration of Demand Response mechanisms in power systems, making it possible to involve electricity consumers in the real-time balance of the power system. Through its flexible components (variable-speed pumps, tanks), drinking water systems, which are huge electricity consumers, are suitable candidates for energy-efficient Demand Response mechanisms. However, these systems are often managed independently of power system operation, for both economic and operational reasons. In this thesis, the objective is the evaluation of the economic and the ecological values related to the integration of drinking water systems flexibility into power system operation through french demand response mechanisms. An analysis of the architecture of french electricity markets is first conducted, allowing to target the most suitable demand response mechanisms considering water systems operating constraints. Some mathematical models to optimize water systems flexibility are then proposed and solved through original heuristics, integrating uncertainties about water demands, market prices and pumping stations availability. Numerical results, which are discussed using three real water systems in France, integrate the economic aspects inclunding risks, operational and ecological aspects. Significant reductions in water systems operating costs are estimated through the optimization of demand response power bids on the French spot power market during peak times. In parallel, uncertainties consideration secures the operation of water systems in real time, and makes it possible to manage economic risks related to the power grid balancing. In addition, significant savings in CO2 emissions, estimated to around 400 tons per day in France, can be achieved by reducing electricity production from fossil sources.

As the share of weather-dependent renewable energy sources increases in the energy system, more grid balancing solutions are needed. For companies investing in energy production facilities, this offers new business opportunities. This master's thesis examines a battery energy storage system (BESS) co-located with a wind farm and utilizing its existing grid connection. The profitability of the battery system investment is evaluated using Net Present Value (NPV), Internal Rate of Return (IRR) and Payback time (PBT). In the analysis, the revenue of the battery system consists of capacity (MW) payments from reserve markets. The profitability of the battery system is studied in both the annual and hourly markets. The report compares the results to those of a standalone battery system to understand the advantages of utilizing the same grid connection. Finally, the investment is analysed further using scenario analysis on the annual degradation and the market price levels. The battery capacity is sized according to the maximum NPV. The results indicate that both the co-located BESS and the standalone BESS are potential investment targets, but the co-located BESS utilizing the wind farm's grid connection offers better returns. The reason for this is that the cost of a new grid connection for a standalone BESS is higher than the revenue lost due to capacity constraints when utilizing the existing grid connection. Hourly reserve markets offer better returns than annual reserve markets. Annual markets yielded an internal rate of return of 9 % and a net present value of 350 kEUR, while hourly markets yielded an internal rate of return of 22 % and a net present value over 10 times higher compared to the annual market returns. The optimal sizing of the battery capacity is found to be between 30 and 40 % of the wind park’s production capacity, or in this case 4-5 MW. / Med en ökande andel väderberoende förnybara källor i energisystemet behövs fler lösningar för att behålla balansen i elnätet. Detta erbjuder nya affärsmöjligheter för energiföretag som vill investera i energilagringslösningar. Denna uppsats undersöker ett batterisystem som är beläget vid en vindpark och utnyttjar en befintlig nätanslutning. En ekonomisk analys med nettonuvärdesmetoden (NPV), internräntemetoden (IRR) samt återbetalningstiden (PBT) av batterisystemet utförs för att utvärdera investeringspotentialen. I analysen består intäkterna från batterisystemet av kapacitetsbetalningar från reservmarknader. Lönsamheten för batterilagringssystemet undersöks både på årsmarknader och timmarknader. Rapporten jämför resultaten med ett fristående batterilagringssystem för att förstå fördelarna med att utnyttja samma nätanslutning. Slutligen analyseras investeringen med hjälp av scenarioanalys för olika marknadsprisnivåer samt årliga försämringstakter. Batterikapaciteten dimensioneras enligt det maximala nettonuvärdet. Resultaten visade att både batterilagringssystemet som utnyttjar vindkraftparkens nätanslutning och det fristående batterilagringssystemet är potentiella investeringsobjekt, men batterilagringssystemet som utnyttjar vindkraftparkens nätanslutning erbjuder bättre avkastning. Anledningen till detta är att kostnaden för en ny nätanslutning för ett fristående batterilagringssystem är högre än de inkomstförluster som orsakas av kapacitetsbegränsningar vid utnyttjandet av den befintliga nätanslutningen. Timreservmarknader erbjuder bättre avkastning än årsreservmarknader. Årsmarknaderna genererade en internränta på 9 % och ett nuvärde på 350 kEUR, medan timmarknaderna genererade en internränta på 22 % och över 10 gånger högre nuvärde jämfört med årsmarknaderna. Den optimala dimensioneringen av batterikapaciteten bedöms vara 30–40 % av vindkraftparkens produktionskapacitet, vilket i detta fall är 4–5 MW. / Sääriippuvaisen uusiutuvien energiatuotantomuotojen osuuden kasvaessa energiajärjestelmässä tarvitaan lisää verkontasapainotusratkaisuja. Energiatuotantolaitoksiin investointeja tekeville yrityksille tämä tarjoaa uusia liiketoimintamahdollisuuksia. Tämä diplomityö tarkastelee akkujärjestelmää, joka sijaitsee tuulivoimapuiston ohessa ja hyödyntää olemassa olevaa verkkoliityntää. Akkujärjestelmän investoinnin kannattavuutta arvioidaan hyödyntäen nettonykyarvoa (NPV), sisäistä korkoa (IRR) sekä takaisinmaksuaikaa (PBT). Analyysissä akkujärjestelmän tulot koostuvat reservimarkkinoiden kapasiteettimaksuista. Akkujärjestelmän kannattavuutta tutkitaan sekä vuosimarkkinoilla että tuntimarkkinoilla. Raportissa verrataan tuloksia itsenäisen akkujärjestelmän tuloksiin, jotta ymmärrettäisiin saman verkkoliitynnän hyödyntämisen edut. Lopuksi investointia analysoidaan skenaarioanalyysin avulla eri markkinahintatasoilla ja akkujärjestelmän rappeutumisnopeudella. Akkukapasiteetti mitoitetaan maksimaalisen nettonykyarvon mukaan. Tulokset osoittivat, että sekä tuulivoimapuiston verkkoliitynnän hyödyntämä akkujärjestelmä että omalla verkkoliitynnällä oleva akkujärjestelmä ovat potentiaalisia investointikohteita, mutta tuulivoimapuiston verkkoliityntää hyödyntävä akkujärjestelmä tarjoaa parempia tuottoja. Syynä tähän on, että uuden verkkoliitynnän kustannus itsenäiselle akkujärjestelmälle on suurempi kuin olemassa olevan verkkoliitännän hyödyntämisen kapasiteettirajoitusten aiheuttavat tulonmenetykset. Tuntireservimarkkinat tarjoavat parempia tuottoja kuin vuosireservimarkkinat. Vuosimarkkinat tuottivat 9 % sisäisen koron ja 350 kEUR nettonykyarvon, kun taas tuntimarkkinat tuottivat 22 % sisäisen koron ja yli 10 kertaa korkeamman nettonykyarvon vuosimarkkinoiden tuottoihin verrattuna. Akkukapasiteetin optimaalinen mitoitus todetaan olevan 30–40 % tuulipuiston tuotantokapasiteetista, joka tässä tapauksessa on 4–5 MW.