The role of pumped hydro storage in the Portuguese National Plan for energy and climate for 2030: A hybrid approach using Energy PLAN and machine learning

The Iberian Peninsula stands at the crossroads of renewable energy expansion and the climate-induced transformation of its water resources availability. Hydropower generation has been an essential renewable energy resource for electricity generation, and it is expected to play a significant role in the transition to a sustainable, low-carbon energy future, mainly because of the pumped hydro storage capacity. However, given the potential effects of climate change, this study examines the role of hydropower in the Portuguese power system, focusing on its impact on generation, storage, and market dynamics in the context of increasing renewable energy capacities. The research proposes a new methodological approach by performing EnergyPLAN simulations for the year 2030 for Portugal and Spain, coupled with a gradient-boosting algorithm to forecast the electricity market prices for 2030. The study shows that the planned capacity of pumped hydro storage is enough to achieve the goals of increasing the integration of renewables to 85 % and reducing the emissions of electricity generation to less than 1 Mton of CO2eq, well below what has been defined in the Portuguese national plan for energy and climate. However, the dependency on electricity imports from Spain will increase significantly, especially in drier years. Further, the study concludes that dammed hydropower plants will shift their current role of main contributors to renewable electricity generation towards a role of arbitraging and balancing the power system. Finally, the study estimates the value of electricity storage in the day-ahead market, providing new insights for policymakers, energy stakeholders, and researchers working in the Iberian energy landscape, namely the need to continue the evolution of cross-border interconnections. [Display omitted] •New methodology to assess hydro-pumped storage systems using ENERGYPLAN combined with a market price forecasting algorithm•Hydro-pumped storage capacity for 2030 is enough to accomplish Portugal NECP goals•Significant increase in the use of storage facilities compared to the current use•Considerable change in the daily usage pattern of storage facilities•Electricity prices are expected to be higher in dry hydrological years