INTRODUCTION
Energy storage has been employed by several utilities over the past 15 years in the U.S., and for more than 40 years in Europe, as a means of improving the power system operation by increasing off-peak power generation to "charge" the storage facility, and by correspondingly reducing required on-peak generation and capacity by "discharging" the storage facility. Although some minor attempts have been made to utilize storage devices such as lead-acid batteries, the only effective device for the bulk storage of energy has been the hydroelectric pumped storage facility. This device employs water as the working fluid, storing energy by increasing the potential energy of the water through pumping it to a high level pond, and releasing energy through the kinetic energy of the stored water passing through a turbine. The total installed capacity of "conventional" pumped storage in the U.S. is currently approximately 10,000 MW. Conventional pumped storage suffers from a number of significant disadvantages, not least being that suitable sites are generally remote from load centers and often the subject of considerable opposition from the environmental standpoint. Attention has therefore been focused during the past five years on the development of alternative means of bulk energy storage; these alternatives include underground pumped hydro (UPH), compressed air energy storage (CAES), various types of batteries, heat storage and magnetic energy storage. Of these, the underground pumped storage and compressed air energy storage concepts have been identified as near-term possibilities (Public Service Electric and Gas, 1976). Development programs potentially leading to the construction of demonstration facilities are currently under consideration by ERDA and EPRI. The UPH concept is similar to conventional pumped hydro energy storage in that electric power is generated during periods of high energy demand by hydraulic turbines located at a low level reservoir using water pumped to a high level reservoir during periods of low energy demand. The difference in these two concepts lies in the location of the lower reservoir underground in the case of UPH rather than on the surface. Similarly, the CAES concept uses underground space to store air compressed during periods of low energy demand, the compressed air being released during periods of high energy demand for use in combustion turbines to power electric generators. The underground space for CAES may be obtained by use of solution mined cavities in salt domes, aquifers or mined hard rock cavities. Each of these alternatives is currently under active consideration. However, the hard rock option would appear, at this time, to present the greatest number of opportunities of development. Studies have shown the availability of a number of locations in the U.S. in which suitable rock may be found at the required depth. (Acres American, Inc., Dec. 1976) Although based on technologies which are essentially proven, each concept requires significant extrapolation of current experience. The development of a UPH or CAES facility would require conmitment of considerable resources, not the least of which would be costs related to initial siting studies and exploration. The purpose of this paper is to examine the relationships between the technical requirements and costs of the exploration in terms of the degree of confidence gained in the economics of the development.
