# Renewables and Advanced Storage in Power Systems: The Iberian Case
## 4 Study Case: The Iberian System in 2030 According to the National Energy and Climate Plans (NECPs)
### Revenues and Costs of Storage:Sensitivity Study  
The total costs of the supplied energy are shown in Table 6, including the fixed costs (investment and fixed O&M) and variable costs (fuel and CO\({}_{2}\)). Costs are shown for the base and extreme cases, as well as their mean values and standard deviations. An increase of 15% in the capacity of the thermal plants to account for their reliability and reserves was considered.  
It is interesting to compare the revenues of storage from arbitrage with the investment costs. To do this, it is necessary to calculate the price of energy in an auction as in the current European day-ahead market, without the requirement for a minimal 5.5 GW of dispatchable energy. This limit will be applied in a subsequent process that will keep the hourly prices set by the daily auction, according to the Spanish market rules.  
To this end, a simulation was performed, keeping the installed power obtained in the optimization process and optimizing the operation of this generation mix without the constraint of the minimal dispatchable power. The cost of the marginal technology reproduces the pricing mechanism under the conditions of perfect competition and gives a better approximation of the revenues of storage, namely, the marginal prices that would be used to buy and sell energy. The price distribution is shown in Table 7. It can be seen that the largest change is the number of hours when the open cycle sets the prices since this technology competes with storage during peak hours. Interestingly, the percentage of the demand covered by thermal technologies (in the last row of Table 6) is lower than the target of 20%.  
\begin{table}
\begin{tabular}{c c c c c c} \hline \hline  & **Base** & \(x_{1}\) & \(x_{2}\) & **Mean** & \(\sigma\) (*) \\ \hline Energy cost & & & & & \\ (\(\ell\)/MWh) & 72.41 & 74.95 & 70.24 & 72.60 & 3.24 \\ \hline Average & & & & & \\ marginal & 35.53 & 34.56 & 37.33 & 35.95 & 3.85 \\ price & & & & & \\ (\(\ell\)/MWh) & & & & & \\ \hline Storage cost & & & & & \\ (M\(\ell\)/year) & 1600.00 & 970.44 & 1617.80 & 1294.12 & 25.01 \\ \hline Storage & & & & & \\ revenues & 751.84 & 294.89 & 1561.10 & 928.00 & 68.22 \\ (M\(\ell\)/year) & & & & & \\ \hline \hline \end{tabular} (*) % of mean value. NOTE: x\_1 and x\_2 mean the high and low storage cost assumptions, respectively.  
\end{table}
Table 6: Cost of energy and storage.  
\begin{table}
\begin{tabular}{c c c c c c} \hline \hline  & **Base** & \(x_{1}\) & \(x_{2}\) & **Mean** & \(\sigma\) (*) \\ \hline No. hours OC & & & & & \\ sets price & 264 & 473 & 218 & 352 & 41.68 \\ \hline No. hours CC & & & & & \\ sets price & 5004 & 4549 & 5295 & 4566 & 4.97 \\ \hline No. hours zero & & & & & \\ prices & 3492 & 3738 & 3247 & 3843 & 2.09 \\ \hline \% of thermal & & & & & \\ generation & 15.83 & 15.15 & 16.89 & 16.0 & 5.43 \\ \hline \end{tabular} (*) % of mean value. NOTE: x\_1 and x\_2 mean the high and low storage cost assumptions, respectively.  
\end{table}
Table 7: Market results.  
Table 6 gives the costs for the different cases. It may be seen that the market prices do not cover the energy costs. The \"missing money\" problem (see Appendix B), especially when renewable technologies set a zero price in the market, is more remarkable than under nowaday conditions. Furthermore, the costs of storage cannot be recovered by arbitrage either, even in the case of a low storage cost (case \(x_{2}\)). This reinforces the need for capacity mechanisms for storage if all the advantages of this technology are to be used.