Study on operation strategy of pumped storage power station under different development models: a case study of China

Abstract Pumped storage, a flexible resource with mature technology, a good economy, and large-scale development, is an important part of the new power system. According to the different stages of the development of the power market, this paper puts forward the corresponding development models of pumped storage power stations, which are successively the “two-part price system” model, the “partial capacity fixed compensation” model, and the “completely independent market participation” model. Then put forward the corresponding business strategies of different development models, establish the economic benefit calculation model, and conduct the simulation. The simulation results show that the internal rate of return corresponding to the above three development models is 6.5%, 7.44%, and 8.23%, respectively. With the continuous improvement of market participation, the economic benefits of pumped storage power stations are also gradually improved, which promotes the cost recovery of pumped storage power stations. In addition, under the three development models, the three factors of capacity electricity price, capacity ratio covered by approved electricity price, and energy conversion efficiency also impact the economic benefits of pumped storage power stations.