Economics

The basic business model for Gravity Storage (described for the case of solar): Excess power from PV plants is stored (purchased) during the day and discharged (sold) at night. The demand for storage is guaranteed by the requirement for utility companies and PV farm operators to provide a reliable power supply at all times of day or night. Grid operators also need bulk storage to balance out fast-changing loads in the system.

The basic business model for Gravity Storage combined with wind power generation is analogous.

Investment costs

Plant construction cost depends primarily on the size of the piston and the geological conditions at the specific location. It is estimated that total investment costs (including planning, grid connection, etc.) for a plant of 8 GWh storage capacity (with diameter approximately 250 m) will typically amount to 200 USD/kWh. The investment can be expected to give a return for at least 60 years, and maintenance costs should be very low.

Revenue models:

The design of the Gravity Storage plant, in terms of pump and turbine dimensions, etc., depends on the operatorĀ“s intended application.

There are several revenue models that may then be applied, which can be combined with each other if desired:

  1. Sell electricity via PPA (Power Purchase Agreement): In combination with PV or wind energy, Gravity Storage delivers 24-hour electricity at a fixed price of around 100 USD/MWh for 20 years or more.
  2. Trading/Arbitrage model: Charge the storage plant (raise the piston) at low wholesale prices, sell energy at higher prices.
  3. Fees for provision of system services and increasing flexibility and security of supply (ancillary services, black-out prevention, etc.)
  4. Optimization of power supply to energy-intensive industries by reducing peak loads.

 

Gravity Storage strives for profitability without reliance on subsidies. Delivering electricity under a PPA seems to be the most promising revenue model at present, and is likely to already be profitable in sunny regions.