Economic evaluation of the system concepts. Working package 3.5

In this study, the economic efficiency of a concept for underground pumped storage (UPSW) in hard coal mining plants is investigated. The aim is to evaluate an investment decision for a UPSW. Two technical design variants are considered: Variant 1 (600 m drop height / 461,814 m³ storage volume) and variant 2 (1000 m drop height / 355,982 m³ storage volume). Variant 2 differs fundamentally from variant 1 in that an active line system is already available at an altitude of 1000 m below NHN as an underground storage facility. In contrast, it is assumed that in the case of variant 1, a complete underground storage system must be excavated at a depth of 600 m. The underground storage system must be installed at a depth of 600 m below the surface. The framework data are selected on the basis of the Prosper Haniel hard coal mine of RAG. In addition, variant 2 is equipped with two ternary machine sets, whereas variant 1 has only one pump turbine. A deterministic techno-economic model of the UPSW based on Matlab has been developed for the performance of the economic analysis, which simulates the participation of the UPSW in the spot and secondary control energy market. The technical and economic framework conditions for the model originate mainly from the project partner Institute of Hydraulic Engineering and Water Management at the University of Duisburg-Essen as well as from electricity price forecasts prepared at the Chair of Energy Systems and Energy Economics. The calculation methodology used in this study corresponds to that of the dynamic investment calculation. For the consideration of data uncertainties a parameter variation based on a best- and worst-case scenario analysis is applied. The results of the study show that under the boundary conditions described here, a UPSW with sole participation in the day-ahead market does not generate a profitable revenue situation. In this respect, the results are in line with the current statements of PSW operators. For the economic operation of a UPSW it is therefore indispensable to offer more profitable system services such as the provision of control energy in addition to conventional electricity marketing on the spot market. In this study, the revenues from participation in the secondary balancing energy and spot market are also determined. Due to technical restrictions, participation in the secondary balancing energy market is only possible for both variants in connection with a power plant network. Obliging contracts that cannot be fulfilled due to a lack of storage capacity are taken over from the pool in the modeling. Although no profitable revenue situation can be achieved with simultaneous participation in the balancing energy and spot market, both variants reduce the financial losses compared to sole participation in the day-ahead market. Due to the plans of RAG regarding the future mine water retention level (700 m below NHN), variant 1 is the preferred plant concept from the point of view of the project group. Based on the findings of this study, the minimum storage volume for Variant 1 is approximately 600,000 m³ to meet the pooling requirement. With regard to the mechanical design, it is advisable to consider several sets of machines for further investigations, such as variant 1+ (two Francis pump turbines), as this is advantageous in terms of flexibility and controllability when participating in the electricity market. Consequently, further investigations are recommendable and very promising. On the basis of the results obtained in this paper, an investment in a UPSW cannot be presented economically under current market conditions. However, this would also apply to new conventional pumped storage plants. It should be noted that almost all the pumped storage plants currently available on the market have been written off. They therefore offer electricity at variable costs and are therefore cheaper than new pumped storage plants that have not been depreciated. This economic efficiency calculation involves major uncertainties, as the evaluation of new systems in early development phases can only be carried out on the basis of inadequate cost data. In addition, electricity economic, political and social unpredictability (e.g. the effects of changes to the Renewable Energy Sources Act (EEG) on electricity prices) represent a high uncertainty potential when considering these long-term investments during the energy turnaround.