Which is the cheapest technology for energy storage and how will storage in mines save the climate?

For a clean energy transition, totally based on green energy, viable storage alternatives are needed in order to recover the excess energy from renewables. Many are in search of the cheapest storage option with the least environmental impact. The ability to efficiently store energy is a key component in achieving the COP21 goals. Without being able to store the green electricity that we produce, we are forced to use energy from fossil fuels to compensate when renewables have an uneven production.

Which storage alternatives can be counted on in the near future? And what are the pros and cons of these energy sources? 

In collaboration with KTH Royal Institute of Technology, a study has been carried out to investigate the cost of storage for four different technologies: Underground Pumped Hydro Storage (UPHS), Pumped Hydro Storage (PHS), Lithium-ion batteries (Li-Ion) and Vanadium Flow batteries (VFB). In traditional PHS plants, water is pumped between different altitudes. However, construction of new plants can have a major impact on the environment. UPHS utilizes underground reservoirs advantageously in unused mines. UPHS has the same capacity and efficiency as PHS above ground but with less environmental impact and lower investment costs.

Li-Ion and VFB batteries uses metals to store energy. VFB batteries are often used in a larger scale, for example in connection with wind- and solar power, while Li-Ion batteries are suited for mobile phones or electric cars. Some strong advantages with these two technologies are the immediate response times and high energy densities, i.e the amount of energy stored per unit of volume. The disadvantages, on the other hand, include the environmental impact associated with extracting the metals and the short life span of ten years. In comparison, PHS has a life span of between 60 and 100 years (International Hydropower Association, 2018). 

Underground storage using water batteries is the cheapest technology for energy storage 

The technologies are compared using the method Levelized Cost of Storage (LCOS), developed by the financial advisory Lazard. The method shows the cost of storage across different technologies and the total costs per kWh of energy stored. It is a simple and established method to compare different energy storage technologies. The graph below is taken from the rapport and shows the cost of storage for each technology. Three things can be observed from the graph:

1.  The range within which the cost may vary 

2.  A prognosis of the cost in the year 2024

3.  The average cost for underground storage 

The result from the analysis showed that underground storage (UPHS) is the cheapest alternative for energy storage. The technology is also likely to remain the most cost-effective form of large-scale energy storage in year 2024. 

Similar to traditional PHS, the most important advantages of UPHS are: the long life span, high capacity, maturity of the technology and high efficiency. However, UPHS has many advantages over traditional PHS. Storage below ground has no limitations regarding lack of geographical locations. Using existing infrastructure reduces investments costs while simultaneously saving large areas of land. Researchers at the Australian National University have identified around 530,000 potential sites for pumped hydro storage. 

Thus, there are several indicators speaking for the potential of the UPHS market to become huge. As the cheapest technology for storage, UPHS can be a sustainable solution for the energy storage problem. Old mines will transition from being unused holes in the ground to being a solution for a viable green energy transition. 

If you want access to the full report, download our White Paper here

Tina Lundgren

Marketing Specialist | Pumped Hydro Storage

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