WHY STORAGE?
Storage critical to energy transition
Reducing the emissions of carbon dioxide (CO₂) to meet the objectives set by the Dutch government requires structural adjustments in everyday life, including a far-reaching transition to renewable energy.
So far activities in the Netherlands have been focused on wind and solar initiatives to produce power. However, for the energy transition to succeed, it is critical to have access to large-scale energy storage capacity that can balance the variable nature of wind and solar. What happens when the sun does not shine or the wind does not blow?
Energy storage and flexibility are two key components in accelerating efforts to meet the climate mitigations objectives and sustainable development goals.
Flexibility
As variable renewable energy resources increasingly displace dispatchable fossil generation, system operators are faced with the challenge of managing increasing uncertainty and variability. Efficient energy storage will help preventing both outage to end-users and extreme levels of price volatility. Pumped hydro storage enhances the power system’s capability to maintain uninterrupted service when encountering large and rapid swings in supply or demand.
THE WORLD’S WATER BATTERY
Electricity storage
Electricity storage in the form of pumped hydro storage, the ‘world’s water battery’, has provided flexible power services to electricity grids since the beginning of the 20th century. Currently accounting for over 96 per cent of installed global energy storage capacity, and over 99 per cent in terms of energy stored. Pumped hydro storage is the best option to balance the variable nature of wind and solar by providing reliable energy in bulk and on demand for sustained periods, while simultaneously avoiding the need for their curtailment during periods of excess supply.
THE O-PAC PROJECT
To efficiently store energy, O-PAC will construct a surface reservoir which will be connected to a lower reservoir at a depth of 1,400 meters below the ground level. In the southern part of the Netherlands a homogeneous rock formation was found, which is suitable for cost efficient construction of the subsurface basin.
O-PAC’s underground pumped hydro storage will use cheap or excess power from the grid to pump water from the underground reservoir into the upper reservoir. From there it can be released to flow back down to the lower reservoir, directed through a turbine, to generate electricity when demand is high, as reflected by high peak prices in the spot market.
Vital to promote maximum use of renewable energy in the Netherlands
O-PAC offers highly efficient electricity storage capacity, improves grid reliability by offering critical back-up during periods of excess demand, and is vital to promote maximum use of renewable energy as it will balance out fluctuations in output from wind farms, solar power and other renewable energy schemes.
It is more efficient, cleaner and more reliable than any other storage technology concept and it can be deployed at much larger scale.
Revenue model
O-PAC’s revenues will be mainly based on energy arbitrage opportunities – using energy to pump water during periods of low demand and off-peak prices and generating energy when there is high demand and selling it into the spot market at higher peak prices.
The resulting dampening effect on electricity market prices will generate a societal benefit to the Netherlands and its citizens of € 140 million per annum.
O-PAC cross-section
Project status
KEY FIGURES
O-PAC will be able to generate 8.4 GWh per cycle, which with an assumed 250 per year results in 2.1 TWh per year. At full power O-PAC will generate 1,400 MW for six hours. This is enough to power 20% of all households in the Netherlands during those six hours.
| Parameter | Value |
|---|---|
| Power | 1,400 MW |
| Capacity | 8.4 GWh/cycle 2 to 3 TWh/year |
| Discharge duration | six hours at full power |
| Round trip efficiency | 80% |
| Ramp rate | <1 minute from 0 to max (1,400 MW) |
| Levelized cost of storage | 41 €/MWh |
| Marginal cost of generation | close to zero |
| Parameter | Value |
|---|---|
| CAPEX | € 1.8 bln 0,017 €/kWh over 50 years |
| Investment | € 2.0 bln (= CAPEX + finance costs during construction) |
| OPEX | € 10 mln/year |
| Footprint | upper basin 500m x 500m (depth 10m) |
| Life time | 50 to 100 years |
| Emission reduction | up to 1.5 – 2.25 Mt CO₂ per year |
O-PAC assets
1. Achieves sustainable development goals
- contributes significantly to the goals of the Climate Agreement
- reduces CO₂ emissions with 1.5 – 2.25 Mt per year
- is vital to promote maximum use of renewable energy in the Netherlands
- the upper basin is suitable for solar panels (double area use!)
2. Prevents grid interruptions
- provides the necessary flexibility to the grid, improves grid reliability and balances intermittent renewable sources (solar and wind)
- on-demand supply
- very quick response time (seconds/minutes)
- 1,400 MW power, 8.4 GWh per cycle, 2.1 TWh per year (based on 250 cycles per year)
- in seconds from 0 to 1,400 MW
3. Stores large quantities of energy
- is the only large scale storage project that can be realised in the Netherlands before 2030
- uses proven and stable technology for large-scale application, while at the same time being innovative
- has a very long life span, up to 100 years or more
4. Contributes to regional and cross-border economy
- fulfils a key role in local system-integration (e.g. Chemelot, Mijnwater)
- offers a tangible opportunity for European cooperation in climate transition
- has a strategic position in the Meuse-Rhine Euregion
- close to HV node, connected to the German and Belgian markets
5. Offers additional societal benefits
- creates 5,000 jobs during construction and 500 indirect jobs during operation
- has dampening effect on electricity market prices will generate a societal benefit to the Netherlands and its citizens of € 140 million per annum
- does not depend ecologically on vulnerable natural landscape
- is an attractive touristic venue