Impact of Electricity Market Volatility on the Management of Hybrid Renewable Systems with Storage
Lizbeth Tipán-Salazar, Natalia Naval, Jose M. Yusta Department of Electrical Engineering E.I.N.A., University of Zaragoza, Spain   2026-06-27

Abstract

This article analyzes the performance of a hybrid renewable energy system integrating photovoltaic and wind generation with Pumped Hydro Energy Storage (PHES) in the Spanish day-ahead electricity market. The methodology employs a simulation model based on generation profiles from Zaragoza, Spain, comparing two scenarios: 2019 (low volatility, average spread of 16.90 €/MWh) and 2025 (high volatility, average spread of 101.77 €/MWh). The results show that the high price spreads (the range between the lowest price and the highest price) of 2025 significantly incentivize PHES activity. Specifically, storage use increased fourfold compared to 2019, enabling an 85% reduction in grid imports during the summer quarter. Economically, the system faces significant seasonal disparity. In 2025, high purchase prices and lower solar availability during the winter (first quarter) result in a substantial net expenditure of 3.1 M€. Conversely, the system generates a net profit of 103.303 € during the summer (third quarter) by maximizing storage arbitrage and renewable self-consumption during peaks price periods. The study concludes that market daily spread acts as a catalyst for energy storage. Despite seasonal economic fluctuations, PHES remains an indispensable tool for mitigating high import costs and ensuring the stability of renewable hybrid systems in volatile markets.

Key words: Daily spreads, electricity market price, Pumped Hydro Storage.

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