The ‘Sleeping Giant Of Energy Storage’ Is Waking Up

A venerable energy-storage technology is getting a new lease on life thanks to a clever redesign and an agreement between the power industry and environmentalists.

“Pumped storage is getting a second look. The sleeping giant is waking up for several reasons,” said Dan Reicher, a senior research scholar at Stanford University and a former U.S. assistant secretary of energy.

The stumbling block for hydropower has long been opposition from environmentalists, because hydropower has relied on dams that damage river ecosystems.

But pumped-storage systems are now being designed as closed-loop systems, far from rivers. When solar and wind production is high, they pump water from a reservoir at a low elevation to one at a high elevation. When power is needed, the water is released back down to the lower reservoir, spinning turbines that generate electricity.

“I’ve been involved for a long time with investors in pumped storage,” said Jay Precourt, an investor, supporter of energy initiatives and founder of Stanford’s Precourt Institute for Energy.

“It is a fantastic project business-wise,” he says in video released by Stanford this month. “In the past the hold up has been the environmentalists. There was pushback in a lot of states from the environmental community. I know an investor right now who’s got deep pockets and a lot of experience that would be dying to do some projects in California.”

There is much less opposition to the closed-loop system, Reicher said, because they’re not built on rivers, they don’t require dams, and because environmentalists “basically put their names on a document which says they’re going to give much stronger support.”

That document is a 2020 Joint Statement of Collaboration signed by American Rivers, the World Wildlife Fund, the Union of Concerned Scientists, and nine hydropower industry organizations. In addition to promoting closed-loop pumped storage, the agreement calls for removing dams “that no longer provide benefits to society, have safety issues that cannot be cost-effectively mitigated, or have adverse environmental impacts that cannot be effectively addressed.”

It also calls for adding power generation to some dams that currently lack it. “It turns out only three percent of U.S. dams make electricity,” Reicher said.

Nonetheless, legacy pumped storage projects provide 90 percent of U.S. energy storage capacity, Reicher said: 22,000 megawatts or 550,000 megawatt hours. Many of those existing projects were built in the 1970s and 80s to capture excess nuclear energy at night. Now they are often pumping water uphill in the afternoon when solar energy is at its peak.

“Pumped storage provides large quantities of long-duration storage measured in days or weeks, with the capacity of individual plants generally measured in the hundreds or thousands of megawatts,” Reicher said. “The largest current pumped storage project is over 3,000 megawatts and is a facility in the state of Virginia.”

The Bath County Pumped Storage Station in Virginia has been called “the largest battery in the world.” Dominion Energy claims it powers 750,000 homes. Built it 1977, it pulls water from a dammed river.

Fong Wan, a senior vice president for Pacific Gas & Electric Company, said he loves pumped storage, but he wouldn’t put PG&E’s money behind it.

“The issue here is actually the certainty of construction costs,” Wan said. “This nation has not, as far as I know, done a new pumped storage (facility) in a long time, and the way the business world works is that if I was to sign up for a project—a big pumped storage project—I would think it’s at least $2,000 per kilowatt which will put it into billions and billions. I want to know cost certainty, just like you would if you were to buy a house, but very few sellers are willing to give me a fixed-price deal, and I cannot take that to my regulators or my customers with an unknown cost structure.

“That’s the biggest problem.”

According to Reicher, utilities would not be asked to put up the money. Because of the urgency for energy storage to balance solar and wind—and the promised decline in environmental opposition—investors are ready to bankroll pumped-storage projects, he said.

“I think the difference may be—and time will tell—we have a much bigger investment community out there, with a lot more money, looking at a very large problem, and I think they’re pretty convinced that we’ve got a technology that can work. It’s still got to be proven, we’ve still got to show that you can get big stuff like this built.”

The Bipartisan Infrastructure Law provides $2.4 billion to rehabilitate, retrofit and remove dams, which may provide some funding for pumped storage. Meanwhile, the coalition of environmental and industry groups is endeavoring to streamline federal licensing for such projects.

“I’m relatively bullish that some of these projects will get built,” Reicher said. “All 80 will not, all 80,000 megawatts will not, but I think a decent number will.”

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