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Economic Feasibility of Semi-Underground Pumped Storage Hydropower Plants in Open-Pit Mines

Wessel, Michael; Madlener, Reinhard; Hilgers, Christoph

Abstract:
This work aims at the economic evaluation of a semi-underground pumped hydro storage power plant erected in an abandoned open-pit mine. For the exploratory model-based analysis, we develop and apply both a simple deterministic and a stochastic net present value (NPV) approach, the latter of which uses a Monte Carlo simulation to account for revenue uncertainty from electricity price fluctuations. The analytical framework developed is applied to two promising sites in the Rheinland region in Germany, Hambach and Inden, making reasonable parameter value assumptions and considering and ignoring the lengthy duration of lower reservoir flooding. The investor’s value-at-risk is computed for alternative performance indicators (NPV, net cash recovery, profit-to-investment ratio, and specific production costs) to compare the different outcomes in terms of the project’s financial risk distribution. Calculations show that a semi-underground pumped hydro storage power plant in an abandoned open-pit mine can be constructed at reasonably low investment costs and operated at low specific production costs. However, because the investment has to be made long before the pit lake is (naturally) flooded—a process that for realistic flow rates may take up to 20 years—the project is highly uneconomical and would require substantial subsidies, as compared to a situation where flooding happens immediately.

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Verlagsausgabe §
DOI: 10.5445/IR/1000122623
Veröffentlicht am 14.08.2020
Originalveröffentlichung
DOI: 10.3390/en13164178
Dimensions
Zitationen: 4
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Angewandte Geowissenschaften (AGW)
KIT-Zentrum Klima und Umwelt (ZKU)
Publikationstyp Zeitschriftenaufsatz
Publikationsmonat/-jahr 08.2020
Sprache Englisch
Identifikator ISSN: 1996-1073
KITopen-ID: 1000122623
Erschienen in Energies
Verlag MDPI
Band 13
Heft 16
Seiten Article: 4178
Vorab online veröffentlicht am 12.08.2020
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