Abstract Underground Pumped Storage Hydropower (UPSH) is a potential alternative to manage electricity production in flat regions. UPSH plants will interact with the surrounding porous medium through exchanges of groundwater. These exchanges may impact the surrounding aquifers, but they may also influence the efficiency of the pumps and turbines because affecting the head difference between the reservoirs. Despite the relevance for an accurate efficiency assessment, the influence of the groundwater exchanges has not been previously addressed. A numerical study of a synthetic case is presented to highlight the importance of considering the groundwater exchanges with the surrounding porous medium. The general methodology is designed in order to be further applied in the decision making of future UPSH plants introducing each case specific complexity. The underground reservoir of a hypothetical UPSH plant, which consists in an open pit mine, is considered and modelled together with the surrounding porous medium. Several scenarios with different characteristics are simulated and their results are compared in terms of (1) head difference between the upper and lower reservoirs and (2) efficiency by considering the theoretical performance curves of a pump and a turbine. The results show that the efficiency is improved when the groundwater exchanges increase. Thus, the highest efficiencies will be reached when (1) the underground reservoir is located in a transmissive porous medium and (2) the walls of the open pit mine do not constrain the groundwater exchanges (they are not waterproofed). However, a compromise must be found because the characteristics that increase the efficiency also increase the environmental impacts. Meaningful and reliable results are computed in relation to the characteristics of the intermittent and expected stops of UPSH plants. The frequency of pumping and injection must be considered to properly configure the pumps and turbines of future UPSH plants. If not, pumps and turbines could operate far from their best efficiency conditions.