Innovative Pumped Storage Proposals Reveal Complex Costs and Benefits

A number of new pumped hydro energy storage projects have been announced over the past several months that aim to use abandoned mine shafts and tunnels to store vast amounts of energy. Newly proposed projects in both Virginia and Germany now join projects being developed in New York and Wales, with the goal of being the first to reuse decommissioned mining sites. Ranging in capacity from 100 MW to 250 MW, these projects are relatively small compared to many existing pumped storage plants and require more creative design and engineering to capitalize on the existing mine infrastructure. While there are several potential benefits to using existing mine facilities, these projects all face significant challenges and risks.

Seeking Advantages

The most widely deployed form of energy storage globally, pumped storage is a mature technology capable of providing massive amounts of energy storage capacity on the grid. However, the development of new projects has remained challenging due to the need for specific sites with the correct geological and geographic characteristics, lengthy and complex development processes, and environmental impact concerns. By using existing mine shafts rather than building new reservoirs, developers hope to overcome many of these issues.

Projects using abandoned mines do not need to find suitable locations for development, as much of the infrastructure needed for the project—namely mine shafts that can serve as reservoirs and grid connections—may already be in place. This should also help developers avoid permitting and land use issues, as well as opposition from local residential areas that is common with new greenfield pumped storage proposals. Overall, developers believe that the cost to build these projects will be considerably lower than that for traditional pumped storage facilities as a result of the reduced need for major construction and fewer permitting hurdles. Furthermore, developers claim that these projects can significantly boost the economy in surrounding communities, a particularly important consideration in rural areas where mines have closed and reduced employment.

Challenges to Overcome

As with all pumped storage projects, these new proposals face significant challenges. In addition to concerns around the environmental impact of such large projects, the length of time required to commission these systems and the related complexity have been major issues. This is partially due to the need for financial arrangements covering the cost to build, own, and operate such large and costly systems. There are additional challenges facing projects at existing mine facilities specifically, such as the potential for large amounts of iron or other minerals to contaminate water used in the system and damage turbines and other equipment. However, likely the most significant challenge to overcome will be the fact that no facilities of this type have been built before. There will always be the possibility for unforeseen engineering and construction challenges to delay development. For example, the mine reuse project currently furthest along, the Glyn Rhonwy facility in Wales, has been planned since 2006 and is now under construction, but likely will not be operational until 2019.

Although these mine reuse projects hold significant potential for large quantities of low cost energy storage, the challenges may be difficult for some projects to overcome. These challenges will only become more prominent over the coming years as costs for battery storage projects continue their rapid decline. We have already seen massive battery storage projects announced that rival the size of some pumped storage facilities. With battery system costs falling at an average of over 8% per year … will these new pumped storage facilities still be economical after even 5 years of development and construction?