Washington, D.C., April 25, 2018 (GLOBE NEWSWIRE) -- The National Hydropower Association (NHA) today released the 2018 Pumped Storage Report, which details both the promise and the challenges facing the U.S. pumped storage hydropower (PSH) industry. PSH, the nation’s largest source of grid-scale energy storage, can help solve some of the most urgent problems facing the electric power sector today. Despite ensuring that electric supply securely matches electric demand and in real-time, market, policy and regulatory burdens continue to hinder its growth.
The Report finds that some of PSH’s key attributes, such as grid reliability and the integration of additional renewable resources, are not adequately compensated within the current environmental and power markets and regulatory constructs. For example, wholesale power market services such as frequency regulation, ramping and spinning reserves are not valued in many of markets today, or valued in one independent system operator’s market rules and product definitions, but not in another. In many cases, these are typically real-time or day-ahead markets and there are no long-term market products where a bulk storage project can attract investors seeking revenue certainty through long-term power purchase agreements or defined value streams.
PSH project developers also face is a lengthy licensing process. Currently it can take up to ten years before a project to be licensed, built and become operational. In today’s fast-moving energy sector, such a long lead time could render a project obsolete before it is permitted.
“As the need for increased grid reliability and flexibility increases, we need to take a closer look at the market and regulatory policies that undervalue the services that pumped storage provides,” said Jeff Leahey, NHA Deputy Executive Director. “Pumped storage can sustainably grow by 35 GW, according to the U.S. Department of Energy. Developing pumped storage, particularly in areas with significant deployments of variable or intermittent generation would significantly improve grid reliability while further reducing the reliance on fossil-fueled generation. For pumped storage to fully realize its growth potential, it requires market policies that appropriately value its grid services and that provide the certainty needed to attract investment.”
In addition to outlining the challenges facing the PSH industry, the Report provides a series of recommendations to guide the energy industry, regulators, and policy makers.
Market and Policy Improvements
- Develop market products that allow flexible resources to be compensated for providing services that help meet electric grid requirements, including fast responding systems that provide critical capacity during key energy needs.
- Develop market mechanisms that evaluate energy storage technologies based on their abilities to provide key supporting services to the overall electric grid, taking into consideration project lifecycle costs, performance and energy storage system degradation.
- Develop market mechanisms and products that recognize the potential energy reliability and security role PSH plays in the domestic electric grid.
Regulatory Improvements
- Establish an alternative, streamlined licensing process for low-impact pumped storage hydropower, such as off-channel, modular, or closed-loop projects.
- In regions without competitive wholesale (energy or capacity) markets, require consideration of energy storage resources in state integrated long-term planning processes; including requiring equal consideration with traditional resources.
- Develop standard evaluation criterion for all forms of energy storage so that different types of energy storage can easily be compared and evaluated.
About Pumped Storage Hydropower
PSH, can act as a “water battery” and help alleviate the tandem challenge of integrating a growing amount of variable renewable resources into the grid while maintaining reliability. It generates power the same way a traditional hydropower plant does, by using a turbine and generator to transform the kinetic energy of falling water into electricity, but with an added feature. A PSH plant can pump water back up hill and store it for later use. That gives PSH the flexibility to inject power into the grid or to absorb it when needed. Both functions are becoming increasingly important for grid stability and reliability.
Today, the United States has 42 existing PSH projects with over 22,000 megawatts of storage capacity, representing more than 97% of all installed capacity of energy storage
California: PSH Pairs Well with Wind and Solar
To illustrate how environmental market policies are effecting PSH, the Report highlights California, which has had to navigate the challenges that come with the rapid deployment of renewable energy. The state’s current Renewable Portfolio Standard calls for renewable energy to meet 50% of its electrical needs by 2030. The California legislature also is considering a bill that would raise that target to 100% by 2045. California already has 10,000 megawatts of grid-connected solar power, the equivalent of about five large nuclear plants, and expects another 4,000 megawatts to come online by 2020.
California is a leader in renewable energy, but managing the integration of increasing amounts of solar and wind generation has become a more acute challenge for grid operators. For instance, solar panels can generate more power than can be used during the middle of the day, but then leave a gap that needs to be filled quickly as the sun sets just as the evening peak load begins to ramp up, which PSH is well suited to address. The excess solar power can be used to pump water back up hill where it can be stored until it is needed to produce power to meet peak evening needs.
PSH can play a key role in California’s energy mix, as the need for flexible assets to integrate variable renewable energy generation technologies.
For more information, and to access the 2018 Pumped Storage Report, go to www.hydro.org/waterpower/pumped-storage/
The National Hydropower Association (NHA) is a nonprofit association dedicated exclusively to promoting the growth of clean, renewable hydropower and marine energy. www.hydro.org
Attachments
