Risk Mitigation and Investability of a U-PHS Project in The Netherlands

• Published in: Energies (Basel) Vol. 13; no. 19; p. 5072
• Main Authors: Kramer, Gert, Arts, Twan, Urai, Janos, Vrijling, Han, Huynen, Jan
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.10.2020
• Subjects: Coal mining; Construction; Electric energy storage; electric grid stabilization; Electricity; electricity storage; Energy industry; energy transition; Engineering firms; Feasibility studies; Infrastructure; Mines; Mining engineering; Mitigation; Nuclear energy; Nuclear power plants; Power supply; pumped hydro storage; regional economic development; renewable energy; Risk; Risk reduction; Uncertainty; Underground storage; Belgium; Netherlands; Germany
• ISSN: 1996-1073; 1996-1073
• DOI: 10.3390/en13195072

We review the status of a 1.4 GW, 8 GWh underground pumped hydro storage (U-PHS) project in the southern Netherlands, which has been under development since the 1980s. Its history shows how the prospect of a large-scale U-PHS for The Netherlands (a country whose proverbial flatness prohibits PHS) has been attractive in every decade, based on proven technology in a subsurface location with validated properties, and solid analysis of its economics. Although the ongoing energy transition clearly requires massive electricity storage, (U-)PHS projects are challenging investment propositions, in The Netherlands, as elsewhere. This case study illustrates a point of general relevance, namely that although the project execution risk, related to uncertainty with respect to subsurface integrity, is very low, the transition risk, associated with the intrinsic uncertainties of an electricity system in transition, is significant. We point out mitigation strategies for both risk categories.