# Economic Feasibility of Underground Pumped Storage Hydropower Plants Providing Ancillary Services
## 4 Conclusions  
The economic feasibility of UPSH plants participating in the day-ahead and ancillary services markets in the Iberian electricity system is presented for three HPSs. A deterministic model has been applied in order to maximize the income and minimize the costs for purchasing electricity. Different DTCs between 4 and 10 h have been considered in order to evaluate the economic feasibility of UPSH plants. In addition, the investment costs when making use of existing underground infrastructure and when excavating new tunnels or caverns as a lower reservoir have been estimated in order to evaluate the profitability of the investment.  
\begin{table}
\begin{tabular}{c c c c c c c} \hline \hline
**Lifetime** & \multicolumn{3}{c}{**50 Years**} & \multicolumn{3}{c}{**75 Years**} \\ \hline
**HPS** & **HPS 1** & **HPS 2** & **HPS 3** & **HPS 1** & **HPS 2** & **HPS 3** \\ \hline
**NPV (k€)** & 83,167.91 & 155,399.55 & 327,628.43 & 122,604.79 & 226,042.18 & 471,892.95 \\
**IRR (\%)** & 7.47\% & 7.68\% & 7.86\% & 7.78\% & 7.97\% & 8.13\% \\
**PB (years)** & 15 & 15 & 15 & 15 & 15 & 15 \\ \hline \hline \end{tabular}
\end{table}
Table 6: Profitability analysis of HPS 1, HPS 2 and HPS 3, making use of existing infrastructure and considering DTCs of 8 h and lifetimes of 50 and 75 years.  
Figure 7: Energy installation cost of battery storage technologies vs. UPSH plants.  
The results obtained show that the number of annual production cycles and the amount of electricity generated decrease when the DTC increases. The maximum number of annual production cycles is 360 when the DTC is 4 h and decreases to 323 when the DTC increases to 10 h. Although the spread between the income from selling electricity and the costs for purchasing energy decreases when the DTC increases, the operating margin increases due to investment costs. In the profitability model, IRRs greater than or equal to 6% are reached when the investment costs are lower than 2000 \(\epsilon\) kW\({}^{-1}\) and the DTC is greater than 5 h. In general, it can be concluded that the IRR increases when the investment costs decrease and the DTC increases.  
A UPSH plant is not economically feasible when new infrastructure has to be built. Maximum IRRs of 2.43%, 2.61% and 2.75% have been obtained for HPS 1, HPS 2 and HPS 3, respectively, with a minimum PB of around 24 years. On the contrary, the investment cost of a UPSH plant is reduced by 46.6% (1675 \(\epsilon\) kW\({}^{-1}\)) when the existing underground infrastructure is used as a lower reservoir. Under these conditions, a UPSH plant could be economically feasible (IRRs greater than 6% and PBs lower than 15 years) when participating in the ancillary services markets, dimensioning DTCs greater than 6 h and using the existing underground infrastructure as a lower reservoir.  
Conceptualization, J.M.; investigation, J.M., J.M.F.-O. and J.L.; methodology, J.M.; software, J.M. and J.M.F.-O.; validation, J.M. and J.M.F.-O.; writing--original draft, J.M.; writing--review and editing, J.M. and J.M.F.-O.; supervision, J.L. All authors have read and agreed to the published version of the manuscript.  
This research received no external funding.  
The authors declare no conflict of interest.