Economic evaluation of an underground pumped storage plant concept under the condition of technical and economic imponderables

The increasing share of non-dispatchable and fluctuating renewable energy sources brings technical and economic challenges to the German energy system. Large scale power storage systems could play a key role in overcoming these issues. An Underground Pumped Hydroelectric Storage (UPHS) is currently under research and development. Given that, the Energy Transition generates difficulties in forecasting the developments of the German electricity sector and due to an inadequate data base, it is necessary the development of new assessment methods to check in a sound way the profitability of this energy storage concept. In this work, the economic evaluation of two UPHS Variants in hard coal mines of the Ruhr Area is carried out taking into account uncertainty in the input data. For that purpose, a stochastic techno-economic model that simulates the participation of the UPHS in the spot and secondary control power markets is developed using the commercial software Matlab. To this end, the investment appraisal is carried out by means of the Net Present Value method, which is embedded in a Monte-Carlo-Simulation in order to capture uncertainties in the input data. The uncertainties of the calculated target figures (Investment Costs, Electricity Storage Costs, Net Present Value) are alter 1.000 runs quantified at a 95% confidence interval. Both UPHS Variants have a storage capacity of approximately 870 MWh. In case of Variant 1 (200 MW) a complete underground storage system at a depth of 600 m would be drilled. On the other hand, for Variant 2 (350 MW) an existing active drift network at a depth of 1.000 m would be used as underground storage. The specific Investment Costs of Variant 1 are within the range of 1.910 Euro/kW - 2.610 Euro/kW, those of Variant 2 within 835 Euro/kW - 1.091 Euro/kW. The estimated Investment Costs of both UPHS Variants at the considered installed and storage capacities are too high in comparison to conventional pumped storage plants. The intervals of the calculated Electricity Storage Costs for Variant 1 (35 ct/kWh - 50 et/kWh) and Variant 2 (30 ct/kWh - 39 ct/kWh) indicate negative Net Present Values. Considering the results obtained in this work, an investment in an UPHS under current market conditions is economically not feasible. However, this would also apply to new conventional pumped storage plants. Because almost all of the pumped storage plants currently available an the market are amortized, they offer the electricity at variable costs and are thus cheaper than unamortized new pumped storage plants. The developed assessment method in comparison to traditional ones has proven to be more suitable for the consideration of data uncertainties in the economic evaluation of an UPHS concept.