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Article

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

1
RWTH Aachen University, Templergraben 55, 52056 Aachen, Germany
2
Institute for Future Energy Consumer Needs and Behavior (FCN), E.ON Energy Research Center, Mathieustraße 10, 52074 Aachen, Germany
3
Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), Sentralbygg I, Gløshaugen, 7491 Trondheim, Norway
4
Karlsruhe Institute of Technology (KIT), Institute of Applied Geosciences—Structural Geology & Tectonics, Adenauerring 20a, 76131 Karlsruhe, Germany
*
Author to whom correspondence should be addressed.
Energies 2020, 13(16), 4178; https://doi.org/10.3390/en13164178
Received: 15 June 2020 / Revised: 22 July 2020 / Accepted: 27 July 2020 / Published: 12 August 2020
(This article belongs to the Special Issue Underground Pumped Storage Plants)
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. View Full-Text
Keywords: NPV evaluation; pumped hydro storage; Monte Carlo simulation; value at risk NPV evaluation; pumped hydro storage; Monte Carlo simulation; value at risk
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MDPI and ACS Style

Wessel, M.; Madlener, R.; Hilgers, C. Economic Feasibility of Semi-Underground Pumped Storage Hydropower Plants in Open-Pit Mines. Energies 2020, 13, 4178. https://doi.org/10.3390/en13164178

AMA Style

Wessel M, Madlener R, Hilgers C. Economic Feasibility of Semi-Underground Pumped Storage Hydropower Plants in Open-Pit Mines. Energies. 2020; 13(16):4178. https://doi.org/10.3390/en13164178

Chicago/Turabian Style

Wessel, Michael, Reinhard Madlener, and Christoph Hilgers. 2020. "Economic Feasibility of Semi-Underground Pumped Storage Hydropower Plants in Open-Pit Mines" Energies 13, no. 16: 4178. https://doi.org/10.3390/en13164178

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