PURPOSE: To reduce application of a limitation on a location condition and facilitate the construction.

CONSTITUTION: A vertical shaft 2 is built in the vicinity of a water source 1, such as sea and a lake, and a power generating device 5 to generate a power by means of a water flow dropped from the water source 1 to the bottom of the vertical shaft 2 through a conduit 4. Water discharged from the power generating device 5 is stored in a tunnel 6 excavated in a horizontal direction from the vertical shaft 2 and by utilizing a surplus power at a period when a power demand is low, the power generating device 5 is driven as a storage pump. Since water in the tunnel 6 is pumped up to the water source 1 and construction in the vicinity of the water source 1 is facilitated, this constitution prevents application of a limitation on a location condition.