For reliable power, some renewable sources of generation require balancing. Pumped hydro offers a natural solution, which can be technically and commercially feasible.
Pumped hydro energy storage projects are a natural fit in an energy market with high penetration of renewable energy as they help to maximise the use of the renewables that are subject to the vagaries of the weather. Pumped hydro provides a load when the wind is blowing and the sun is shining, and it also provides a reliable and immediate source of energy when the sun has set and the wind has dropped.
PUMPED HYDRO OFFERS UTILITY-SCALE STORAGE AND SYSTEM STABILITY
As the proportion of renewable energy in an energy market increases, the need grows for the stability and consistency provided by utility-scale energy storage. For example, it has been estimated that South Australia needs system-wide storage of 500 MW for a period of 10 hours to improve the flexibility of wind farm operators and to maintain security of supply.
At the smaller scale of energy storage, the buzz about various types of batteries continues – but the only storage option with a proven track record at the utility scale is pumped hydro.
Pumped hydro works by pumping the water stored in a lower reservoir into a more elevated reservoir. The water stored at height can be passed through a turbine on its path back to the lower reservoir, creating electricity as and when needed, and making the best use of the water resource without waste.
A functioning AC power system needs inertia, fault level, frequency and voltage control as well as energy sources to function to an acceptable standard. Pumped hydro assets can provide all of these important contributions to a stable and successful power system, levelling out the fluctuations in availability of wind and solar energy, and helping to regulate voltage and frequency.
NEW OPPORTUNITIES FOR PUMPED HYDRO IN AUSTRALIA
Despite the significant potential and benefits of pumped hydro projects and the identification of possible sites, few new pumped hydro projects have been developed beyond concept level.
This means that opportunities exist for developers in states such as South Australia and Queensland that have set ambitious renewables targets and must maintain energy security.
THREE FACTORS FOR PUMPED HYDRO SUCCESS
For successful pumped hydro projects, developers need to identify a viable site, achieve a technically and commercially feasible design, and make the most of the economics of the energy market.
1- IDENTIFYING A VIABLE SITE
For a pumped hydro project, what’s needed is a source of water, and two reservoirs separated by a significant change in elevation. The water could come from a nearby river, an existing reservoir, or the sea. With many thousands of potential sites across the country, a developer needs smart methods of filtering to reduce the many possibilities to just a few ideal sites.
An important consideration is the effect on the viability of pumped hydro projects of the relative remoteness of sites, through both the efficiency of the power’s round trip and the marginal loss factors (factors applied to a generator or a load, and calculated based on the size and distance of the generator or load from a central point).
As for any development, the process of identifying sites must also consider topography, land use and environmental constraints. Pumped hydro projects generally present similar but reduced environmental risks as conventional hydropower projects as they tend to have smaller footprints.
2 – ACHIEVING A TECHNICALLY AND COMMERCIALLY FEASIBLE DESIGN
Entura’s experience on Genex Power’s Kidston pumped hydro project has shown that it is possible to construct low-cost pumped hydro projects in Australia through careful site identification and clever project design. Where a pair of suitable reservoirs don’t already exist, constructing a turkey’s nest dam may offer a solution.
A turkey’s nest dam is a reservoir built by excavating earth from the centre of the reservoir and moving it to the edge to help form a continuous embankment. Turkey’s nest dams have been used successfully around the world in pumped hydro projects, providing opportunities to build projects where elevation changes significantly over a short distance.
Additionally, turkey’s nest dams can help to minimise capital costs by reducing conduit lengths and maximising head (the difference in elevation between the upper and lower reservoirs).
3 – MAKING THE MOST OF THE ECONOMICS OF THE ENERGY MARKET
Understanding the opportunities and constraints in the energy market is critical to a pumped hydro project’s financial viability.
When you can store energy, you can dispatch electricity at peak times, gaining the highest price point in the market. Conversely, water is pumped to the upper reservoir in off-peak periods or when supply from renewable sources is high and market prices are low. This ‘energy arbitrage’ makes the most of the price difference in the electricity market.
Selecting the optimum installed capacity of a pumped hydro project also requires detailed understanding of energy markets. It is possible that a pumped hydro project can act to flatten peak prices to the point where the returns on a project are insufficient to meet financiers’ hurdles, so detailed revenue modelling is essential to determine the tipping point between enough and too much installed capacity.
With careful selection of sites, clever design, and the right mix of capacity and costs, pumped hydro holds an important key to unlocking the full potential of renewables in Australia’s electricity market.
