EPV Energy abandons the pumped-storage hydro plant project under development at Pyhäsalmi Mine
EPV Energy has decided to withdraw from the pumped-storage hydropower plant project planned for the Pyhäsalmi Mine. The company was forced to make this decision due to the rising investment and financing costs. The initial investment cost estimate almost doubled in the cost calculations carried out this year on the basis of calls for tender. Moreover, the current interest rate market is not supportive of an investment of this magnitude.
Closing this project has been a difficult decision for EPV Energy. Had it been completed, the pumped-storage hydro plant in the old disused mine would have been a unique solution for energy storage and flexible electricity supply. Over the last two and a half years, EPV has committed a great deal of time and money to the development of this project. Various parties have collaborated in these preparations, and EPV Energy would like to thank its partners for their smooth cooperation and significant contribution to the common goal. EPV’s strategy emphasises its desire to be at the forefront of progress and to remain resolutely involved in the transformation of the energy sector. When your goal is to be a trailblazer, disappointments are inevitable, and all you can do is acknowledge them and carry on by finding other solutions.
Unfortunately, the project could not be postponed until a change in the market. The mine is a unique environment, and maintaining its extensive infrastructure in such a condition that would allow industrial investments would require extensive financial expenditure before an investment decision could even be secured.
As more and more electricity is generated by renewable wind and solar power, the need for solutions for balancing power, flexibility and energy storage remains. Different energy storage solutions support and bring flexibility to the electricity system. EPV continues to work tirelessly to solve the problem of clean power generation and the flexibility and storage solutions needed to support it, and plans to continue to invest heavily in such projects in the future. The company also intends to continue following the development of essential new technologies as a basis for new projects.
At the heart of EPV’s strategy is renewable electricity, with new technologies to manage its generation, storage and use. Looking forward, new electricity will be solely generated using the zero-emission energy sources of nuclear, wind, hydro and solar power, which are key to our strategy. EPV Energy generates just over 5% of Finland’s electricity. The company also produces heat for residents and businesses in Vaasa, Seinäjoki, Tornio and Raahe. As much as 88% of EPV’s electricity generation is already emission-free, and it is also taking big steps towards zero emissions in heat production. At the end of this year, EPV will already have an electric boiler capacity of 240 MW and a thermal energy storage capacity of 11 GWh.
Investments in energy storage
Pyhäsalmi Mine is more than 1,445 metres deep and located in the town of Pyhäjärvi. Underground mining there will come to an end in 2022. The infrastructure provided by the mine is unique on a global scale and would offer excellent opportunities for many kinds of purposes. One plan for the further utilisation of the mine is to use it as an energy reserve and pump storage station. EPV Energy joined this interesting project at the beginning of 2021 and decided to explore this storage solution further.
The energy storage project planned for EPV Energy’s Pyhäsalmi Mine took an important step forward in the autumn of 2021 when the Ministry of Economic Affairs and Employment of Finland granted the project EUR 26.3 million of aid for investment costs.
This energy storage project, if implemented, would bring excellent flexibility to EPV’s future energy system.
EPV Energy is a major producer of wind power and, in the future, solar power and it needs flexibility in its production portfolio to counteract the effects of natural elements on its weather-dependent energy generation. The project is in line with our strategy and presents one potential option as a flexible capacity solution.
Several studies have already been carried out on the feasibility of the energy storage project, and EPV Energy has contributed to them by carrying out market forecasts of renewable energy and providing background information on rock engineering in collaboration with its partners.
At the heart of our strategy is renewable electricity, with new technologies to manage its production, storage and use. In the future, new electricity will be solely generated using the zero-emission energy sources of solar, wind, hydro and nuclear power, which are key to our strategy.