Pump up the dam: Pumped storage makes a comeback in the US

National Grid Ventures is one of several companies in the US planning pumped hydro plants. (image: SDCWA)
Published: Mon 09 Sep 2019

A significant generation capacity shortfall is looming in the US as coal plants retire and tough environmental standards make new natural gas plant permitting almost impossible in some states.  

California and Washington are working towards 100% clean energy goals and 6GW of spinning reserves/inertia at fossil-fuelled plants will be retired in the Pacific Northwest alone, leaving utilities little choice but to rely on energy storage as they plan their future resource requirements. With short-term solutions of up to a few hours such as batteries still in their infancy, the US is planning to build longer duration pumped storage facilities for the first time in two decades.  

Pumped storage projects generate electricity by moving water between two reservoirs located at different elevations to store energy. When electricity demand and power prices are low, excess electric generation capacity is used to pump water from the lower reservoir to the upper reservoir. When electricity demand is high, the stored water is released from the upper reservoir to the lower reservoir through a turbine to generate electricity. 

Many megawatt hours of wind and solar energy are wasted due to grid congestion curtailments or simply because the timing of the greatest renewable output – as the sun shines during the day – does not match peak demand in the evening as the sun goes down and people arrive back home. 

Can Swan Lake flatten the duck? 

These operational challenges of solar are known as ‘the duck curve’, a visual representation of the mismatch between the timing of peak production and peak demand.  

“Not to be chicken little here but it’s moving toward a pterodactyl curve with over 10GW of utility-scale solar currently headed to over 100GW to meet California’s goal alone,” says Nate Sandvig director at National Grid Ventures, one of the companies that has already secured a licence to construct and operate a new pumped storage facility in Klamath County, Oregon from regulator the Federal Energy Regulatory Commission (FERC). Pumped storage is the ideal solution to complement shorter duration batteries, says Sandvig. While it had generally been considered expensive, difficult to permit for environmental reasons or requiring specific geographical conditions, pumped storage is making a comeback as advances in technology and the longevity of the asset mean that over its lifetime it is cost-competitive with other storage options, according to recent studies.  

The 400MW Swan Lake project is strategically located in the high voltage grid, and when it comes online in 2025 it will provide 9 hours or 3GWh of storage at an estimated cost of $800 million.  

“People equate hydro to archaic technology but it’s state of the art now,” Sandvig tells Engerati.  

“It can respond in short time scale, and can be operated remotely with automatic generation control, meaning it can be called on for quick ramping or frequency response.” The closed-loop plant is slated for GE variable speed turbines, although a final decision has yet to be made, he adds.  

National Grid Ventures has another pumped storage project in Oregon under consideration at FERC, the 1,200MW Goldendale plant planned for 2028 for which the permitting process should move faster thanks to the American Water Infrastructure Act enacted last year requiring the regulator to issue a licence within two years of filing. This project was selected as one of two plants to be used as a case study as part of the US Department of Energy’s techno-economic studies research, which had its kick-off meeting in June.  

National Grid is hoping to sign power purchase agreements and expects plenty of interest, noting that Portland General Electric states the need for 200MW of pumped storage in its integrated resource plan as the bellweather of regional utilities developing plans to meet the regions aggressive clean energy goals. Flexible options such as a tolling arrangement or part owner/operator could also be considered, Sandvig said.   

There are 39 existing pumped storage plants in the US with a capacity of 22GW, with about 160GW worldwide. More than 20GW has had a preliminary permit issued in the US, with another 19GW pending.  

Pumped hydropower storage (PHS) capacity is expected to grow modestly in Europe, according to the International Hydropower Association, between 8,000-11,000MW by 2030, driven by the need for increased flexibility due to variable renewable energy growth.

“In many regions, however, barriers to PHS growth are the uncertain revenue streams, as the long-term business case for energy arbitrage is uncertain and alternative revenue streams from capacity, balancing and ancillary service markets develop slowly. Most additions in Europe are expected in Switzerland, Austria, UK, Portugal and France, while some prospective projects in Romania, Ireland and Ukraine may also go ahead,” the association says in a paper: The world’s water battery: Pumped hydropower storage and the clean energy transition.

 

Mythbusters 

Consultants E3 showed that short duration storage can’t necessarily meet the capacity need of the region without a significant overbuild of renewables, using their RESOLVE model in a study: Resource Adequacy in the Pacific Northwest. 

The San Diego County Water Authority, which secured a licence from FERC last year for the 500MW/4,000MWh San Vicente Energy Storage Facility, published a paper: Pumped Energy Storage: Vital to California’s Renewable Energy Future Release saying pumped energy storage is more cost-effective than batteries due to their short duration. The California system operator CAISO found in a case study that a 500MW pumped storage project could save customers up to $51 million/year in improved efficiencies in system operation. 

Navigant Consulting also concluded in a report: Comparing the Costs of Long Duration Energy Storage Technologies that while the falling upfront costs of lithium-ion battery storage systems have dominated media attention on storage, a more holistic view of total project costs shows that pumped hydro storage delivers much better economics for ratepayers. 

National Grid Ventures commissioned its own study from Evolved Energy Research, which debunks the myth that pumped storage is not cost effective, and indicated a need for 8,000MW of energy storage. Batteries, pumped hydro and seasonal options using hydrogen and compressed air will all be needed in order to decarbonise the energy system, Sandvig says, but the value of longer duration storage is increasing. 

Links:

E3 Resource Adequacy in the Pacific Northwest: http://www.publicgeneratingpool.com/wp-content/uploads/2019/01/E3_NW_RA_Presentation-2018-01-05.pdf

San Diego Country Water Authority Pumped Energy Storage: Vital to California’s Renewable Energy Future Release: www.sdcwa.org/san-vicente-energy-storage-facility

Navigant Consulting Comparing the Costs of Long Duration Energy Storage Technologies: https://www.slenergystorage.com/documents/20190626_Long_Duration%20Storage_Costs.pdf 

 

The 'duck curve' showing California's supply vs demand

‘The world’s water battery: Pumped hydropower storage and the clean energy transition’: International Hydropower Association