Construction of the Paldiski PHS could begin in the second quarter of next year, Peep Siitam, CEO of the developer OÜ Energiasalv, told ERR.

"Talks with potential builders are ongoing in the next room," he noted.

Siitam hopes to have the 500-megawatt (MW) PHS plant up and running by the end of 2029 already, although at a lower storage capacity. "But at the planned authorized capacity of six gigawatt-hours (GWh), or 12 hours of continuous production, by the end of 2031," he added.

According to the CEO, the PHS facility operates on a simple principle. "Electricity is generated by letting water flow from an upper tank to a lower tank through a turbine," he explained. "The distinctive feature of PHS plants is that water can be pumped back too."

These water tanks will be located in Paldiski, Northwestern Estonia, at a depth of 750 meters underground. Water will be let into them for energy production, and pumped from there back into the sea for energy storage.

Some of this energy will be lost, and a plant like this does not itself produce energy, however according to Siitam, that isn't the point of the PHS plant either; the facility is intended to store energy produced when it isn't being consumed and to supply electricity to the grid when actually needed. Thus, electricity can be generated even when there is little wind or sun.

On the other hand, the PHS plant would help ensure security of supply, because if energy production were to suddenly drop due to a fault, the turbine could start operating immediately – unlike a shale oil-fired power plant, there would be no need to heat up a boiler first. The only limiting factor is storage capacity.

"What makes Paldiski, or all of our Zero Terrain technology, distinctive is the fact that it's modular," the Energiasalv CEO highlighted. "We have authorized 12 hours, but as increasing our capacity comes at a very low cost, we're actually already preparing today and in reality are talking instead about a 30-hour storage capacity, i.e. not 6 GWh but 15 GWh of storage capacity, which would allow electricity to be generated at 500 MW for 30 hours."

Until now, PHS facilities around the world have been built chiefly in hilly or mountainous regions. The English-language name "Zero Terrain" is a reference to the fact that the Paldiski PHS is a new type of facility that could also be built in locations where there are no hills or mountains.

Siitam said that Energiasalv has plans to build ten similar storage facilities worldwide, but isn't planning any more in Estonia.

"Quick napkin math says that around 15-20 GWh of storage in [Estonia's] electricity system should be optimal," he noted.

Developer hoping for state guarantee

The total price tag for the construction of the PHS plant is €1 billion, and in order to raise this money from investors, Energiasalv is hoping to receive a state guarantee, similarly to how the state ensures wind farm developers that they will be able to recover their money.

"No private investor can take on the risk that the market organization will change in one way or another here over the years," Siitam stressed. "This risk isn't theirs to manage."

The planned Paldiski PHS plant will not be offering seasonal storage either, meaning that with a PHS facility, it isn't possible to accumulate a significant amount of energy in summer to then sell cheaper electricity come winter. The goal is to offer the market stable electricity prices capable of being forecast by both the day and the hour.

The PHS facility being built in Paldiski will have the capacity to store 6 GHw of energy in 12 hours. The output of this facility is comparable to the average daily electricity consumption of Estonian households.

As a strategic infrastructure project, Energiasalv's preparations have been supported by funding from the EU's Connecting Europe Facility (CEF).

Energiasalv's investors include AS Alexela, Sunly AS and Vool OÜ.

--

Follow ERR News on Facebook and Twitter and never miss an update!