The world’s biggest and most effective battery, hydroelectric pumped storage, is more in demand than ever. The technology that uses water in an upper and lower reservoir to store and provide energy on demand is proving an important player in the rapidly changing global energy market.
The biggest driver for energy storage is the need for a reliable clean energy source that can ensure the success of the global movement to reduce greenhouse gas emissions (GHGs). It is estimated that the pumped storage market size will surpass $390 Billion by 2024. The demand can be seen from Australia to California, the United Kingdom to China. Pumped hydro, which already accounts for 97% of installed energy storage capacity, is rapidly growing.
The push for GHG reductions and the need for energy storage at national, state, and local levels around the world continues to be the biggest market drivers in a changing energy mix. In 2016, the Paris Climate Agreement brought 195 nations together to move forward in this push. Recently the UN’s Intergovernmental Panel on Climate Change (IGCC) painted a bleak picture . The Paris agreement is not enough.
Communities are increasing the number of intermittent renewables that need large-scale energy storage options to integrate them into the electricity market, making energy available when people need it and storing excess generation when the wind blows and the sun shines, but there's no demand for the power. While batteries, compressed air and fly-wheels are small-scale energy storage solutions, pumped storage remains the most reliable and most impactful scalable solution.
Obstacles to Meeting the Need
Despite an increase market demand for pumped storage, several obstacles continue to plague the industry. In the United States one of the biggest issues is the long and arduous licensing and permitting process for hydropower projects. The Federal Energy Regulatory Commission (FERC) has issued only a small handful of pumped-storage facility licenses in recent years. It can take up to five years just to get the approvals for a project, before construction can start. There must be more integration of federal and state agencies into the early-stage licensing process for these projects. Additionally, alternative streamlined licensing processes for low-impact pumped storage hydropower, such as off-channel or closed-loop projects with minimal environmental impacts, are needed.
Pumped storage also requires a long-term vision from the utility or energy provider. There are large upfront capital costs that must be fronted by rate payers or investors who will not immediately feel the benefits. It takes a visionary energy provider and utility to understand the benefits of pumped storage and its role in delivering a safe, clean, reliable, and secure energy future for communities around the world.
According to the National Hydropower Association’s 2018 Pumped Storage Report, the transmission grid and electrical system were not designed with energy storage in mind. While benefits of expanding pumped storage and similar technologies are clearly apparent in regions that do not have adequate storage capacity, current market structures and regulatory frameworks in many regions often do not present an effective means of achieving this goal. To address this, we must facilitate an energy market structure in which transmission providers benefit from long-term agreements with energy storage facility developers.
Planning to Achieve a Clean Energy Plan
Pumped storage is only a small piece in a larger, complex, and evolving energy puzzle that includes changing generation portfolios, moves toward distributed generation, needs for improved transmission and distribution, and dynamic market conditions. For the industry to best meet the needs of our clients and end users we must look at the full portfolio and long-term vision and understand the role we play.
Currently the Los Angeles Department of Water and Power (LADWP) is studying the feasibility of transforming the Hoover Dam into a giant energy storage system, which would make it an energy marvel for this century. The Boulder Canyon Pumped Storage Project would provide up to 2,000 MW of energy storage.
LADWP showcases that the vision and the need for more pumped storage exists, and as an industry we now must deliver.
Mario Finis senior vice president and leader for Stantec's WaterPower & Dams business throughout the world. Finis has 30 years of private and public sector experience in the design and project management of hydropower projects throughout North America and abroad.