Editor’s note: Wind industry executives will find this executive summary of interest because pumped storage may provide the best way to store large amounts of unneeded wind-generated power.
An essential attribute of our nation’s electric power system is grid reliability – ensuring that electric generation matches electric demand in real-time. The primary challenge in ensuring reliability is that electricity has no shelf life – it must be generated when needed – and electricity demand continually changes, especially between daytime periods of peak demand and night-time periods of low demand.
Electric transmission grid operators have long met this challenge on a real-time basis with a limited number of generation technologies – specifically hydropower and gas-fired combustion turbines – that have the ability to start up quickly and/or vary their electric output as the demand changes.
However, these solutions may not be enough as we move into a world with far greater amounts of renewable energy on the grid. In that new reality, reliable, affordable and grid-scale storage of energy must be on the table. Fortunately, a technology exists that has been providing grid-scale energy storage at highly affordable prices for decades: hydropower pumped storage. Indeed, for the foreseeable future hydropower pumped storage stands alone as the only commercially proven technology available for grid-scale energy storage.
The last decade has seen tremendous growth of wind and solar generation in response to favorable tax incentives and other policies. While increasing the amount of renewables on the grid is a good thing, the variability of wind and solar generation increase the need for energy storage.
Developing additional hydropower pumped storage, particularly in areas with recently increased wind and solar capacity, would significantly improve grid reliability while reducing the need for construction of additional fossil-fueled generation. Grid scale storage could also reduce the amount of new transmission required to support many states’ goals of 20-33% renewable generation by the year 2020.
Pumped storage hydropower has a long history of successful development in the U.S. and around the world. Energy storage has been a part of the U.S. electric industry since the first hydropower projects,
primarily through the flexible storage inherent in reservoirs. In the U.S., there are 40 existing pumped storage projects providing over 22,000 MWs of storage, with largest projects in Virginia, Michigan and California (Bath County, Ludington and Helms, respectively). Additionally, there currently are 51,310 MWs representing over 60 pumped storage projects in the FERC queue for licensing and permitting. Globally, there are approximately 270 pumped storage plants either operating or under construction, representing a combined generating capacity of over 127,000 megawatts (MW). As a proven technology, it been shown to be cost effective, highly efficient, and operationally flexible. This grid scale storage technology has been used extensively to both store and redistribute electricity from periods of excess supply to periods of peak demand and provide grid reliability services in generation mode. . Similar to the U.S., European energy policy is also focused on adding clean, renewable energy to the grid. And the significant amounts of wind and solar being brought on-line is the motivating force that is driving new pumped storage development noted above.
The National Hydropower Association (NHA) believes that expanding deployment of hydropower pumped storage energy storage is a proven, affordable means of supporting greater grid reliability and bringing clean and affordable energy to more areas of the country.
While benefits of expanding pumped storage capacity are clear, current market structures and regulatory frameworks do not present an effective means of achieving this goal. Policy changes are needed to support the timely development of additional grid-scale energy storage. To this end, NHA has developed a series of recommendations to guide the energy industry and policy makers. NHA’s key policy recommendations are presented in detail in Section 4 of this paper, and include:
- Create market products that allow flexible resources to provide services that help meet electric grid requirements, including very fast responding systems that provide critical capacity during key energy need periods.
- Level the policy playing field for pumped storage hydropower with other storage technologies to encourage the development and deployment of all energy storage technologies.
- Recognize the regional differences within the U.S. generation portfolio and the unique roles energy storage technologies play in different regions.
- Recognize the energy security role pumped storage hydropower plays in the domestic electric grid.
- Establish an alternative, streamlined licensing process for low-impact pumped storage hydropower, such as off-channel or closed-loop projects.
- Improve integration of Federal and state agencies into the early-stage licensing processes for pumped storage hydropower.
- Facilitate an energy market structure where transmission providers benefit from long-term agreements with energy storage facility developers.
This paper includes two supporting appendices that present additional detail on historic and current trends in pumped storage hydropower development (Appendix A) and provide a brief summary of advancements in equipment technology (Appendix B) which may provide further benefits to the integration of additional variable renewable energy resources.
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