The next generation of pumped storage

8 June 2020

Jim Day, CEO of Daybreak Power in the US, gives an insight into his company’s plans for new pumped storage plants near the Hoover and Glen Canyon Dams. By 2030, Day says, the need for large-scale, cost-effective storage will be glaring and pumped storage will realise its potential as an essential element of the transition to a clean-energy future.

The first slide of Daybreak Power’s first-ever presentation to potential investors quotes Paul Allen, the legendary co-founder of Microsoft, asking what he calls the most exciting question imaginable: “What should exist? … What do we need that we don’t have?”.

The answer I reached in the years leading up to co-founding Daybreak in 2018 is this: A bunch of big-honkin’ pumped storage hydropower projects, for the simple reason that we’re going to need a ton of cost-effective, proven, long-duration energy storage if we, as a society, are to have any hope of integrating high levels of intermittent wind and solar power, and thereby slash greenhouse gas emissions to put the brakes on catastrophic climate change.

Plus, we can create a lot of jobs and maybe make some money on it!

Joyce Patry, a former MBA classmate, and I founded Daybreak in the Northern Virginia suburbs of Washington, DC, as an early-stage developer of these massive infrastructure projects. 

Despite extremely limited resources, we pulled together some engineering and cost-configuration studies that had previously been conducted on potential pumped storage sites at US Bureau of Reclamation (BOR) dams around the West. In late 2018 we filed a FERC preliminary permit application for the 1540MW Next Generation Pumped Storage project near Hoover Dam/Lake Mead, and followed that up with a July 2019 application for the 2210MW Navajo Energy Storage Station near Glen Canyon Dam/Lake Powell on the border of Utah and Arizona.

Hoover Dam, and Fortification Hill in the distance, the site of Daybreak Power’s first proposed project - the 1540MW Next Generation pumped storage hydropower facility. 

First of a pipeline of projects

These projects are the first two of what Daybreak is planning to be a pipeline of pumped storage projects at premier locations around the country and, eventually, in overseas markets. 

As proposed, both of these projects would utilise the existing BOR lakes as the lower reservoir; include new upper reservoirs constructed at the top of nearby geologic formations; and connect them through water conveyances and powerhouses using variable-speed pump/turbines.

The upper reservoir for the Next Generation project would be sited at the top of Fortification Hill, which towers about 762m above Lake Mead about 8km upstream of Hoover Dam. A 500kV transmission line would run about 19km to connect the project at the Mead Substation, a transmission hub south of Las Vegas that connects to markets in Southern California, Nevada and Arizona.

The upper reservoir of the Navajo Energy Storage Station (NESS) would sit about 396m above Lake Powell on the Cummings Plateau, on Navajo Nation lands. A 500kV line would link the project to an interconnection at the recently retired Navajo Generating Station coal plant, from which now under utilised transmission lines run west to Nevada and California markets and south to the Phoenix area.

The use of existing lower reservoirs, excellent elevation gain and relative proximity to existing transmission lines are factors that contribute to initial Association for the Advancement of Cost Engineering (AACE) Class 5 cost estimates that indicate both of these projects could be built at costs—roughly US$1 million per megawatt installed capacity for Next Generation and US$1.6 million/MW for the NESS project— that would make them extremely competitive with the cost structures of other proposed pumped hydro facilities or other storage technologies such as lithium-ion batteries.

Both of these projects are at a very early stage—FERC is currently reviewing the preliminary permit application for NESS, which if issued will give us three years of priority rights at the site to conduct further studies of the geology, hydrology, economics and other issues to determine feasibility and move on to licensing. We are at a similar phase of proving out the feasibility of the Next Generation project as we prepare a preliminary application for a Lease of Power Privilege through BOR, which will lead the federal licensing of that project. For both projects, we’re looking at in-service dates in the 2030 timeframe.

Glen Canyon Dam and Lake Powell in Arizona. Daybreak Power’s proposed 2210MW Navajo Energy Storage Station would be located near here.

Challenges ahead

Daybreak understands there will be many, many challenges to overcome before these projects could ultimately come to fruition. Among the main hurdles will be to secure water rights from the Colorado River — no small feat, particularly at a time of falling water levels in Lake Mead and Lake Powell as draught conditions worsen in the face of climate change. The NESS project will never happen without the buy-in of the Navajo Nation, and neither project will advance without the support of BOR, the National Park Service (which oversees the national recreation areas at both lakes), local water users, state and local governments, or the many landowner and conservation organisations who already are raising valid concerns about potential adverse impacts that must be mitigated.

Further, transmission interconnection studies will need to show that the grid can handle these massive projects at these particular sites, and point to whatever upgrades and their costs that would need to be made to support the projects. Similarly, much more detailed economic studies will need to point to the potential commercial viability of the projects.

More broadly, markets need to evolve to support new pumped hydro and other long-duration storage technologies. There is simply no need in 2020 to commit billions of dollars in capital to build these projects, when grid operators can simply dispatch existing gas-fired power plants to serve load and balance the ebbs and flows of wind and solar generation. Even looking ahead, many regulators continue to hold out hope that they’ll be able to meet their emerging storage needs by simply popping in lithium-ion battery systems right where they need them, quickly, with minimal permitting problems, safely and at low cost. And if it turns out that the batteries can’t actually shift load into the late afternoon/evening peak, degrade within 10 years and tend to catch fire, well…

The need for large-scale, cost-effective storage

Given all these challenges, many people have written off pumped storage, saying it is pie-in-the-sky, never going to happen. We respectfully disagree. Maybe there’s no need in 2020, but by 2030 we think the need for large-scale, cost-effective storage will be glaring. We believe we and some smart partners will be able to overcome all of these licensing, financing and market challenges and realise the enormous benefits these projects will bring—the fact is, people license and build large infrastructure projects all the time.

The other fact is that the problem of climate change isn’t going away. States and utilities around the country have set targets of reaching carbon-free or net-zero emissions, and the only way to do that is to permanently back out coal and gas-fired power plants, not just peakers but baseload, combined-cycle plants. Daybreak is counting on these states to walk the walk, and pumped storage can be the big, heavy artillery that we know can provide the massive amounts of storage they’ll need.

We see many signs that an acceptance of new pumped storage is now growing. California and Oregon utility regulators recently called for procurement of pumped storage in their latest integrated resource plans. Some of the biggest, smartest energy companies such as NextEra, National Grid, Dominion and CIP have recently invested in new pumped storage projects, and Daybreak has been incredibly encouraged in recent months to see the level of interest building in our projects.

We are more convinced than ever that these projects are going to happen, and that pumped storage will realise its potential as an essential element of the transition to a clean energy future.


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