Pumped hydro – the forgotten storage solution

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What if there was a proven way to store vast amounts of energy at capital costs lower than what battery technologists hope they might achieve in 20 years?

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hydroStorage is in the energy news now, in more places than can be listed.

To pick a few, here is recent news from Europe, Tesla, and Queensland.  Everyone is looking to the day when battery technology can economically partner with the popular yet variable renewables: solar PV and wind.

But what if today there was a proven way to store vast amounts of energy at capital costs lower than what battery technologists hope they might achieve in 20 years time? A technology with high round-trip efficiency and one heck of a lifespan: 85 years and counting!

If you have read this article’s title, then you know where we are going with this: pumped hydro.

You may know, in energy terms, pumped hydro can be enormous (the Bath County Virginia facility with 3 GW of generation capacity and 30 GWh of stored energy is said to be the “world’s largest battery”), or niche (the 11 MW El Hierro pumped hydro facility, partnered with wind, now makes that Canary Island 100% renewable).

Possibly you already know that pumped hydro – with 140 GW of generation capacity installed globally – dwarfs all other forms of frequently and deeply cycled, on-purpose energy-storage technologies such as batteries, compressed air, flywheels, molten-salt-thermal storage, or synthetic chemicals created to store energy, combined!

Why? Because for so long pumped hydro has been the cheapest. At the University of Melbourne Energy Institute (MEI) we surveyed literature costs for pumped hydro projects globally and found capital costs as low as $100 to $200 capital per kWh of useable energy stored. Chemical battery makers are aiming for costs in the range of $200 to $500 capital per kwh (useable) to be on the market in 2025.

Due to this technology-cost gap and other factors such as the growing penetration of renewables, you may know pumped hydro is resurging globally: in China and Europe, and it is again being considered in Japan, Canada, and the US (California, Hawaii, North Carolina, and even in the desert state of Arizona.)

You may know Australia already has three large-scale pumped hydro facilities in Queensland and New South Wales, operating for more than 30 years: Shoalhaven (240 MW), Wivenhoe (500 MW), and Tumut 3 (600 MW).

However since we haven’t built any large-scale pumped hydro in Australia for 30 years, you may think that’s it.  We live on a flat continent, a dry continent, and we won’t be damming the Franklin River in Tasmania any time soon.  No we won’t. One reason being, we don’t need to.  Because here are three things you don’t need for pumped hydro: a lot of land, a lot of water, or even a river valley.

Small footprint: Pumped hydro differs from conventional hydroelectricity in that it doesn’t need to store a lot of water. Whereas Lake Eucumbene in the Snowy Mountains might meet the irrigation needs of downstream farmers by storing massive amounts of seasonal rain and snow-melt in a 15,000 hectare lake, useful pumped hydro reservoirs might be only 50 hectares, or even as small as five.

Small water top-up: With pumped hydro, water is recycled over and over again from the upper to the lower reservoir and back again.  Other than the first fill, the only water top-up required is to balance evaporation and leakage versus rainfall. Nearly all of the world’s pumped hydro facilities use freshwater, but if you prefer to use saline or seawater, the coastal cliff-top seawater pumped hydro facility on Okinawa has been helping to keep that Japanese island powered since 1999. In the case of Okinawa, the lower reservoir is quite large, because it is the Pacific Ocean.

Pumped hydro is no turkey: Rather than damming a river valley, many pumped hydro facilities around the world use water storages that would be known in Australia as “turkey-nest” dams: water reservoirs built on flat ground by excavating earth from the centre of the reservoir and moving it to the edge to help form the dam walls.

What you do need for low-cost large-scale pumped hydro are two ponds separated by an elevation of at least 100 meters in a near-the-grid location where the two ponds are not more than three kilometres apart. Be assured, there are thousands of such sites in Australia. It can be more challenging to work out ways to reject sites than to find them, as ROAM Consulting learned when they undertook their review of pumped hydro for the Australian Energy Market Operator’s eastern states 100% renewable energy study.

With limited time and budget, ROAM had to devise a computational way to reduce the number of sites analysed from “over 100,000 sites” down to around 70. We had the same problem when we mapped coastal sites in South Australia and western Victoria.  Beyond the eastern states, suitable pumped hydro sites have also been described in Western Australia and the Northern Territory.

But there is one more thing you need for economic pumped hydro: the right market incentives. Our pumped hydro energy-arbitrage analysis found times and places where, if there was more pumped hydro in the National Electricity Market (NEM), it would play a role in balancing electricity supply/demand and in moderating wholesale prices, for example, during summer heat waves when electricity prices spike to over $10,000 / MWh.

However given falling electricity demand and excess generation capacity now in the NEM, it isn’t surprising that you don’t hear many commercial firms openly talking about investing in new pumped hydro for Australia. Although there was the recent Leyshon Resources Ltd. media release about re-purposing two dis-used gold mines at the fringe of the Queensland grid.

And who can predict the future around renewables and other aspects of our Australian energy markets? Pumped hydro arbitrage value may be on the rise again as renewables penetration grows and El Nino approaches. For those Australian energy users and suppliers that would like to see the grid be stable, better-utilised and not “abandoned”, now is a good time to examine the future role to be played by pumped hydro.

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  1. SolarBusiness_ 4 years ago

    Pumped Hydro has enormous potential and benefits, couldn’t agree more with that. However, they are net energy negative, requiring more energy to pump up than is gained when its released. In your cost of $100-$200 per MWh LCOE, what assumptions do you make abut energy input costs? What happens if you input (say) PV at $150 MWh LCOE to drive the pumps?

    • sean 4 years ago

      150MWh? try 80, or in a few years 40.

    • Chris Fraser 4 years ago

      You’d need cheap energy to drive the pumps, maybe even free energy. That would be not limited to a spinning n+1 NEM coal or gas generator that could be tasked to pump when not needed for anything else at the time. In the enviable case of having no fossil-powered pumps, you would need cheap solar but i suspect this would only need to have an LCOE cheaper than the retail rate during the day. Both hydro and lithium-ion have a round trip efficiency of about 85% so those are comparable alternatives.

    • Tim Forcey 4 years ago

      Solar Business: The costs in our article that you mention are capital costs, not LCOE. Yes, it can be confusing!

      • rui_bernardo 2 years ago

        Hi Tim, thank you very much for the article, it is really interesting! I am trying to access the link you reffered in the previous reply, but it seems to be broken. Do you know where else may I find it? Thanks!

      • rui_bernardo 2 years ago

        I already found it, no worries!

    • dwj 4 years ago

      If you have a predominantly wind and solar grid then as soon as available generation exceeds demand, the energy has virtually no value.
      The reason most pumped hydro systems were built, back in the 60s and 70s, was to make some use of nuclear energy which would otherwise just have gone to waste. The marginal cost of generation in each case is very low and so the economics of pumping works just fine.

    • Catprog 4 years ago

      and if we have 5 electricity units of PV on our grid and only 4 being used then the extra 1 unit has a value of $0.

    • Colin Nicholson 4 years ago

      Funny that it made total sense when it was to be used to store excess electricity from nuclear power stations, but, apparently doesn’t make any sense for wind produced electricity, and in any case lakes are such a disgusting eyesore

  2. Henry WA 4 years ago

    It would be interesting to compare the cost of the proposed Alinta Solar Tower Plant in Augusta with a similar sized PV with pumped hydro storage.

    • Craig Allen 4 years ago

      Very good point Henry. The El Alamein military training area just out of Port Augusta has a range of desert Mesas that are perhaps 300m or more in elevation. It’s a very geologically stable region. Build some massive storages up there, pump salt water up from Spenser Gulf and you have as much storage as you could ever need. This could then be used not just for pv generation, but for all that wind energy South Australia is increasingly generating. And with PV you have a lot more options as to where to put it. Put it on the mesas. Put it on raised frames above all Port Augusta’s roads. Get everyone in the town to put oversized arrays on their roofs. That region is so ridiculously sunny it doesn’t matter where you put them.

  3. Chris Fraser 4 years ago

    Good. I take it that 85+ year life will contribute to some quite low LCOEs, so in the near future we may compare some LCOE figures for both chemical and hydro storage. Readers would also be interested in the costs of more intangible things like impact of dams and lithium/whatever extractions and recycling on the environment.

  4. David Osmond 4 years ago

    While pumped hydro may be far more economic than battery storage, it has to work with differences in the wholesale electricity prices, while battery storage behind the meter can work with differences in retail pricing.

    For example, households with new PV systems will typically be paid ~8c or less per kWh for exported power, but will pay ~30c per kWh for imports. So battery storage can work with this differential of ~ 22c per kWh ($220 per MWh).

    Hydro storage on the other hand will work with wholesale electricity pricing, and there are far fewer instances of $220 per MWh pricing differences for them to work with.

    So much in the same way that solar PV may end up being more successful than wind power, despite being more expensive, for the reason it can compete with retail electricity pricing whereas wind competes on the wholesale market. So too may battery storage be more successful than pumped hydro.

  5. Phil Gorman 4 years ago

    So simple, so elegant, so bleedin’ obvious, it’s invisible to politicians. The losses due to pumping would be more than offset by the low cost of photovoltaic or wind generation.

    Pumping sea water would be far more expensive than fresh due to its highly corrosive properties.

    Fresh water can be recovered from salty or contaminated water relatively cheaply by the use of evaporation channels circulating water through plastic tunnels. Such systems would be well suited to tidal foreshore regions with large tidal ranges. Sluice gates could be used to control flow at very little energy cost. A high diurnal temperature range is also desirable to maximise recovery. There are plenty of Australian coastal, riparian and wetland zones that would satisfy these criteria.

    It should also be possible to design systems in which solar evaporation ‘ lifts’ large quantities of the water vapour at least a hundred metres. They would be small scale reproductions of nature’s rain making water cycle.

  6. Les Johnston 4 years ago

    Pumped hydro might be worth a close look in the vicinity of Wallerawang Power Station as the closure of Wang means there is a ready to go connection to the grid. One of the challenges with this site is the national parks around the area. The other option with pumped hydro is the use of sea water. This only requires one upper dam.

  7. coomadoug 4 years ago

    Pumpimg water using fossil fuel generators is pretty much the filthiest thing one can do to the environment, given the eficiency of the process falls from a horrible 35% in the coal gen to something around 25% by the time we retrieve it.. We dont have enough large scale solar to capitalise on the large load blocks required to take advantage. There are opportunities in a practical sense where wind could do so. However the market we have is not sympathetic to the idea and the contracts that would be required to augment this opportunity are easily burried by other market options. A few things need to happen.
    1…We need a market that rewards the consumer for turning off load at all levels.
    2…We need a market that first manages volatility with load side information and response at the micro level.
    3…We need the fossil fuel that remains to move from the supply first in the load cycle
    4….When there is an excess of renewable generation we then pump
    5… We need a carbon price to make this happen.
    The market we have now rewards generators for forcing energy onto a system without detailed micro annalysis of the need and no ability to control loads at the micro level.
    Again the industry, dispite the market forces is moving to smaller distributed loads and generation that is just ideal for small scale storage at the load end and at the micro level.

  8. dwj 4 years ago

    I think your cost estimates are based on an outdated paradigm. These costs are assuming relatively low storage size relative to generation capacity – just like the old schemes designed for off peak storage of coal or nuclear generation. For a renewables based grid, the storage needs to be much larger relative to generation capacity. Not 8 hours or so, but 8 days! When you have much larger dams without increasing the generation capacity, the cost per kWh is greatly reduced. There are a number of places in Australia where very large storages could be built at costs much lower than $100 per kWh.

    • JonathanMaddox 2 years ago

      You’re probably right about the engineering costs, but the land/environmental cost would be high for a large reservoir.

      Of course, the more energy storage the better, but a few hours’ storage with power capacities comparable to real overnight minimum power demand are actually going to prove *very* useful towards achieving very high penetrations of intermittent primary generation … they’ll make the difference between firing up fossil-fuelled power stations on a nightly basis or only on a seasonal one.

  9. Ben Rose 4 years ago

    Good work Tim. I am in the US and recently toured the Hoover Dam, built in the 1930’s, so there’s nothing new about the scale of hydro technology. It has 10 m diameter head race tunnels; one could feel the ground shake when standing above them in a chamber 500 ft below the dam water level.

    There is also a pumped storage facility at Ludington on Lake Michigan, with a turkey nest pondage of several hundred hectares. I hope to visit is and talk to people there about how they view the facility and any problems they may have had.

    • Tim Forcey 4 years ago

      Hi Ben. Enjoy your trip. I guess one thing I have learned and what we are trying to tell people about is that while facilities like Hoover Dam and Ludington are enormous, rather small turkey-nest type pumped hydro (reservoirs of just a few hectares in size) can be really useful too.

      We describe Ludington in our research paper. See link to University of Melbourne Energy Institute within the article.

  10. George Michaelson 4 years ago

    I can’t help thinking that if green investment was directed to making one of these, with a mission to sell electricity at the point of peak cost which would undercut generation enough to dis-incentivize the coal and gas engines from firing up, then it could single-handedly deliver what people want.

    The problem with a classical shareholder investment on this is that its anti-return-on-investment: it doesn’t make sense if the cost of capital is high and the income below achieved rates of return in the market. But for an investor who wants the outcome more than the profit…

  11. Catprog 4 years ago

    Wivenhoe is technically not pumped hydro. Split Yard Creek at Wivenhoe is.

  12. michael 4 years ago

    See http://WWW.genexpower.com.au for a state of the art, large scale Australian pumped storage innovation. The project is now in feasibility stage.

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