The main factors influencing the cost of pumped hydro storage (PHS) are diverse and include both technical and economic considerations. Here are some of the primary cost factors:
Technical Factors
- Head: The vertical distance between the upper and lower reservoirs significantly affects costs. Higher head requires less water to store the same amount of energy, potentially reducing reservoir size and costs but possibly increasing tunnel and penstock costs due to depth.
- Site Geology and Terrain: Geological conditions can impact excavation costs, and challenging terrain affects access road construction and transmission line installation.
- Reservoir and Dam Construction: The size of reservoirs, dam design, and material costs are crucial. Larger reservoirs can offer economies of scale but require more land and possibly more complex dam structures.
- Water Conveyance System: Tunnels, penstocks, and other conveyance structures are expensive components, and their design (e.g., length and diameter) can vary significantly depending on site conditions.
Design and Operational Factors
- Power Output and Storage Capacity: The design power output and storage capacity directly impact costs. Higher capacities may benefit from economies of scale but require larger infrastructure.
- Round-Trip Efficiency: Higher efficiency reduces energy losses and can influence economic viability by reducing the cost of maintaining and operating the facility.
Economic and Regulatory Factors
- Indirect Costs: These include engineering-procurement-construction (EPC) costs, contingency funds, taxes, and other overheads, which can add significantly to the total cost of a project.
- Regulatory Environment and Incentives: Government policies, tax credits, and public-private partnerships can influence total project costs by providing financial support or regulatory advantages.
- Market Conditions: The presence of a futures market for ancillary services can improve the financial attractiveness of PHS, as it allows for better revenue forecasting and planning.
- Cost of Materials and Labor: Fluctuations in the prices of construction materials and labor can also impact overall costs.
In summary, both the technical layout of a PHS facility and broader economic and regulatory factors play crucial roles in determining its cost.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-factors-influencing-the-cost-of-pumped-hydro-storage/
