Pumped storage hydropower is critical for the energy transition

Our world is rapidly changing. And we find ourselves in the midst of a global transformation: the energy transition. How do we harness nature’s raw power for the betterment of all?

The push to move from an energy system based on thermal power generation (i.e. burning fossil fuels) to one based on generating power using renewable energy, is critical to the preservation of our planet.

But at the same time, the energy systems enabling our way of life must be reliable.

Enormous energy harvesting systems are being established to capture energy from the wind, sun, rivers, ocean tides, and even from the earth’s molten core. The challenge with these new energy types is that they rely on the elements. And relying on natural elements, rather than burning what we dig up on demand, leaves us with a dilemma. What will we do on days when the sun isn’t shining, and the wind won’t blow?

There is a clear need to store excess renewable energy, allowing us to store it when we have plenty of it and release it to the grid when we need it. One logical storage solution for massive amounts of renewable energy is pumped storage hydropower (PSH).

With a booming supply of energy from intermittent renewable energy sources, PSH is well-positioned to be the key enabling technology for the energy transition. In fact, 95 percent of today’s worldwide energy storage is pumped storage.

Energy storage made simple. Using water, gravity, and strategically placed turbines.

Electricity must be consumed as soon as it is generated and intermittent generation, like solar and wind, doesn’t always coincide with power demand. This can create a surplus for which grid operators must find off-takers. Surplus energy generated during periods of low demand results in low to negative local marginal pricing. This means that the grid operators have to pay an off-taker to accept the energy.

One of the best ways to convert intermittent electricity into useful energy is through the release of water stored at a PSH project.

Water pumped to the upper reservoir using surplus energy can be released down into the lower reservoir of the PSH system generating timely electric power, utilizing the kinetic energy recovered when water is dropped through a turbine.

PSH uses reversible pump-turbines which can operate as generators or as pumps, making pumped storage a unique type of hydropower facility.

Pumped storage hydro is technically feasible at almost any scale.

But it’s most attractive and economical at very large scales. As with most large hydropower projects, it requires a large upfront capital investment. But once operational, PSH is cost-effective compared to alternatives.

Ancillary services stabilize the grid and add value to the bottom line.

Hydropower, especially PSH, can offer stabilization services not available from solar, wind, or batter-energy storage systems. These important grid services are termed ‘ancillary services’ and include spinning reserve, non-spinning reserve, frequency regulation, reactive power support, and black-start capability.

Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) rely on ancillary services from hydro to keep the grid stable as more and more intermittent generation is added. Ancillary services represent an important revenue stream paid to pumped storage system operators from RTPs and ISOs.

Storing renewable energy is not a new concept.

Society’s oldest, largest, and primarily solar-powered industry is food production. The chemical energy content found in most foods (i.e. calories or kilojoules) originates from sunlight converted via photosynthesis in food crops.

The only way humanity can manage a consistent, year-round food supply is through storage. This ranges from massive grain silos and warehouses right down to kitchen pantries.

Similarly, as we convert our energy system to operate on harvested renewable energy, energy storage systems are emerging at every scale from household battery systems to utility-scale battery energy storage systems (BESS).

We’re helping our clients build massive energy storage projects such as BESS and hydrogen, but we’re also working on PSH projects. These now represent the longest-lasting bulk energy storage option available.

Hydropower isn’t a new concept either.

For over a century, hydroelectric facilities have been a reliable contributor to electricity supplies in many countries.

Hydropower relies on large volumes of water falling through closed tubes or tunnels called penstocks, which feed into a hydraulic turbine. The force of this falling water turns the turbine driving the generator, making electricity.

Today there are thousands of hydroelectric facilities worldwide, ranging in size from residential or small business based ‘pico’ hydro plants (less than 10 kW), to community use ‘mini’ hydro (less than 1 MW), to massive-scale hydroelectric dams like the 14 GW Itaipu dam in South America.

Itaipu, one of the world’s largest hydroelectric dams located on the Paraná River between Brazil and Paraguay.

What obstacles might be found around the bend?

A PSH project is not without its obstacles and it’s important to solve some key technical challenges.

From our experience supporting hydroelectric dam projects, planning is one of the first challenges that must be addressed. This includes consideration of location selection, which takes into account serious consideration of water supply availability, water rights, right-of-way/land acquisition, and system configuration to minimize environmental impact. Planning also must consider the geotechnical and hydrogeological context to ensure it will allow cyclic storage and release of millions of cubic meters of water.

Constructability of dams, penstocks, reservoirs, turbines/generators, and pipelines is also paramount. As with any major energy facility construction project, if costs aren’t carefully controlled, they overshadow savings in operations and maintenance.

As with other energy generation facilities, the availability of an energy transmission connection to the regional electric grid is key.

Factors relating to long-term asset operation and maintenance need to be included in the lifecycle cost. Hydropower facilities have the advantage of very long lifecycles compared to other energy storage and generation facilities.

Every dam project comes with complex social and environmental risks to mitigate.

There are inherent project risks anytime a project interacts with precious freshwater resources and aquatic habitat. This poses greater risk in regions where environmental regulators, Indigenous peoples, or local stakeholders have a large say in project success. This is why we recommend incorporating environment and society considerations, early on, for the projects we support.

Some key non-technical risks can be posed by regulatory or stakeholder issues. No different than other projects which impact water, you’ll need permits, licensing, stakeholder liaison, and water rights support. We can also help develop the multitude of local benefits that are associated with a PSH facility, such as water supply, recreational use, habitat enhancement, or flood control.

In many jurisdictions, projects must undergo an impact assessment. And for your peace of mind, climate resilience and mitigation planning will ensure you minimize the impact posed by the changing climate.

There is a lot to think about with pumped storage hydro.

We support all aspects of PSH and our power and water experts have a long history of supporting hydroelectric dam projects. We have helped our clients to overcome obstacles and have delivered power, dam, and reservoir conceptual studies, design, permitting, and community engagement across the globe.

If you're facing challenges on your pumped storage hydro project, we’re here to help. Reach out to our global team at WET@advisian.com.

Download brochure: Pumped Storage Hydro

Thirsty for more?

Understanding water-related risks and opportunities allows you to implement better project approaches. Stay tuned as we take a deeper dive into water usage considerations across the energy transition.

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