Armenia Energy Storage Program: Energy Modeling and Economic/Financial Analyses

Armenia, South Caucasus
Armenia Energy Storage Program: Energy Modeling and Economic/Financial Analyses

Client: The World Bank

Type: Study

Finishing date: December 2022 (March 2023)

Team: Dragana Orlic – Project Manager, D. Vlaisavljevic, M. Kostic, N. Miljanic

The objective of the assignment was to assess energy storage (and other economically viable competing options such as open cycle gas turbine) in Armenia through power system modeling and economic and financial analyses.

Based on models of Armenia and neighboring power systems developed in Plexos software for the years 2025, 2030, and 2040, generation hourly dispatch simulations have been carried out with the aim to determine benefits of all relevant and feasible storage (and other) options for Armenia’s power sector in terms of technologies and capacities. Those benefits include increased social economic welfare, and relevant environmental and climate outcomes such as RES curtailment amounts and CO2 emissions.

Quantified indicators in social economic welfare and climate benefits have been used as inputs to the economic analysis as well as estimated capital and operation costs. For each analyzed project, the economic indicators have been identified, namely ENPV and EIRR.

Financial viability of a potential storage projects have been analysed as well. This analysis took into account only financial benefits and remuneration based on the existing legislative and regulatory framework in Armenia under various business model options, particularly TSO/ISO ownership; long-term capacity payment; and pure market remuneration among others. For each analyzed project, the financial indicators FNPV and FIRR have been identified, with separate scenarios for each main category of storage technologies and implementation models.

Type of services provided:

  • Development of the power system model in Plexos software tool
  • Analyses of the system operation in 2025, 2030 and 2040 in different Scenarios
  • Implementation of the MonteCarlo simulations for different climatic, hydrological and thermal availability conditions
  • Calculation of system operation and market indicators
  • Identification of possible business models for storage projects in Armenia
  • Calculation of the ENPV and EIRR
  • Calculation of FNPV and FIRR