In the media

Experts differ over value of pumped hydro as California lawmakers mull bill

By Mark Watson

S&P Global Platts

15 May 2019

Mark Repsher, energy markets expert at PA Consulting, discusses pumped hydro projects and battery storage with S&P Global Platts.

As California lawmakers debate legislation ordering the California Independent System Operator to procure 2-4 GW of long-duration bulk energy storage, industry observers differ over a recently released white paper touting the advantages of pumped hydro storage over batteries.

The white paper concludes that large-scale energy storage is crucial for California to integrating increased renewable energy en route to a goal of 100% clean energy by 2045.

Large-scale energy storage allows the grid operator to efficiently balance generation and demand, improve transmission efficiency, stabilize the grid and shift power supply “over longer time horizons, such as several days,” the paper states. The paper compares the long-term cost of pumped hydro, in $/MWh, to the levelized costs of various alternative types of storage, particularly batteries, and finds that over the long term — 20, 40, 50 and 100 years — pumped hydro costs significantly less.

Mark says that if batteries likely have life spans of 10 to 20 years, while pumped hydro facilities have life spans of about 100 years, battery costs would need to fall to about 20% of pumped-hydro costs to reach parity.

Mark adds that pumped hydro has its limitations as well, mainly involving siting issues such as topography, land use, recreation issues, water availability and evaporation.

He continues: “Either way, the large capital expense of a sizable pumped storage facility will likely necessitate long-dated contracts with credit-worthy load serving entities to make investments feasible — these facilities will not likely be built on a merchant ‘spec’ basis.”

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