Can pumped-hydro help Colorado utilities integrate more renewables?

From The Mountain Town News (Allen Best):

Plan for Yampa Valley filed with fed agency

Conceptual work has begun on a pumped-storage hydro project along the Yampa River five miles east of Craig. The project was conceived to provide electricity to assist Colorado utilities in balancing the intermittency of wind and solar generation as they advance toward 100% renewable portfolios during the coming decade.

In pumped-storage hydro, water is released from a higher reservoir to produce electricity when needed most. The water in the lower reservoir is then pumped uphill to the higher reservoir when electricity has become more readily available.

Colorado has two existing pumped-storage hydro projects. Cabin Creek Generating Station, between Georgetown and Guanella Pass, harnesses a 1,200-foot vertical drop to produce up to 324 megawatts of electricity. Completed in 1967 and operated by Xcel Energy, it serves as effectively a giant battery with a four-hour life, the same as a humongous bank of Tesla batteries.

Near Leadville, at Twin Lakes, the Mt. Elbert pumped storage hydro plant can produce up to 200 megawatts. Operated by the U.S. Bureau of Reclamation, that pumped-storage hydro was completed in 1981.

Near Craig, the project—it’s really no more than an idea—would use three turbines to produce 600 megawatts, nearly as much as Colorado’s largest coal-fired power plant. The idea submitted to the Federal Energy Regulatory Commission on Aug. 20 calls for two relatively small reservoirs of storage capacity of 4,800 acre-feet each connected via a tunnel and conduit, with a total drop of 1,450 vertical feet. This compares with a 1,200 drop at Cabin Creek.

The lower reservoir would not be on the Yampa River, nor would it require a constant infusion of water. Rather, it operates in a closed loop. Only water lost to evaporation would have to be replaced. In an open loop hydro system, water is drawn directly from a river to be pumped uphill.

Matthew Shapiro, the applicant, says the preliminary permit awarded by FERC in November for the Craig-Hayden project is best described as a placeholder for a future license application. He hopes to begin producing electricity toward the end of this decade, just as several utilities in Colorado aim to achieve 100% renewable generation. See Nov. 24 notice in the Federal Register.

Creating pumped-storage hydro, he says, requires considerable patience but also capital. One project in Wyoming that Shapiro’s company proposes has an estimated cost of $1.8 billion.

The United States has not had a new pumped-storage project since 1993. The Craig-Hayden project is the only FERC filing for Colorado.

North Park is traversed by the 345-kV line that transmits electricity from Hayden Station to Ault, in northeastern Colorado. Photo/Allen Best.

Meeting the checklist

Despite its jumbled geography and abundant water, the Centennial State actually is a difficult place for new pumped hydro projects, says Shapiro. The right kind of topography, with enough vertical drop over a short distance but not too much is needed, but also proximity to transmission and low environmental sensitivity.

“It’s a significant challenge. Finding the combination of factors is not easy,” Shapiro says. “But that is what a good pumped-storage developer does during the site-screening process.”

The Craig site checks all the boxes. Private land is easier to develop than public land, says Shapiro, and it has that. Transmission lines export the electricity in three directions and to several states, but especially to east of the Continental Divide in Colorado. The Hayden and Craig coal-fired stations together have 1,724 megawatts of generating capacity, the most of any area of Colorado.

Water is also needed. The two coal-burning stations together own 15,000 acre-feet from the Yampa River, far more than the 5,000 acre-feet needed for this project. The plants will close between 2025 and 2030.

This is from the Jan. 15, 2021, issue of Big Pivots, an e-magazine tracking the energy transition in Colorado and beyond. Subscribe at bigpivots.com

Finally, a pumped-storage hydro project needs customers. Shapiro reports seeing a promising market within Colorado. Two utilities—Platte River Power Authority, a co-owner of the Craig plant, and Holy Cross Energy—both have adopted goals of 100% renewables by 2030. Xcel Energy, the primary owner of the Hayden units and a part owner at Craig, has a 100% emissions-free goal for 2050.

All analyses of attaining high levels of renewables in electricity supplies have focused on three crucial pillars:

One, demand needs to be recontoured to better take advantage of when renewables are abundant, such as linking warming of hot water to times of abundant electricity.

Second, energy supplies in Colorado need to be better connected with a broader geographic area, either to the west or possibly to the Great Plains and conceivably in both directions, thus allowing greater ability to take advantage of renewable energy. The sun might not be shining everywhere, but the wind is always blowing somewhere. There is actually some predictability to this, if you get large enough terrain.

And third, there needs to be storage. The Craig-Hayden idea envisions eight-hour storage, compared to the four-hour value of lithium-ion batteries. So-called green hydrogen, which uses renewable electricity to create hydrogen from water, can deliver 50 to 100 hours of storage, but the technology and economics lag. “I think there is going to be a mix, particularly over the next 20 to 30 years before I think green hydrogen really matures,” says Shapiro. “We will see a mix of storage types. I don’t think we are going to do 100% renewable energy without additional advanced energy storage technology.”

Utilities have been closely watching developments. Duane Highley, chief executive of Tri-State Generation and Transmission, operator of the three units at Craig, said on an October webinar that his utility sees no need to make decisions about energy storage until 2024 and does not actually need it until 2029-2030. The three units at Craig will be shut down between 2025 and 2030. The two Hayden units operated by Xcel are to be shut down in 2027 and 2028.

Three units at Craig Generating Station will be closed during by 2030. Photo/Allen Best

The value of storage

A 2019 report by Synapse Energy Economics that was commissioned by the Colorado Energy Office spoke to the need for advanced energy storage as Colorado decarbonizes its electricity.

Storage can provide frequency regulation, voltage support, energy arbitrage and deferral of transmission and distribution infrastructure investment,” says the report, “The Future of Energy Storage in Colorado: Opportunities, Barriers, Analysis, and Policy Recommendations.”

“Although pumped hydro is currently the most prevalent type of energy storage in the United States, traditional battery storage technologies (primarily lithium-ion) have experienced rapid market growth within the last few years. As costs continue to decline in the coming decade, flow batteries are also expected to become common in large-scale storage applications.”

Pumped-storage hydro does not figure prominently in the analysis by Synapse. However, the consultant did find need for public policy that serves to encourage the market for storage in Colorado.

“Though lithium-ion battery costs are projected to decline in the coming years, there is debate about whether they are expected to become cost-competitive with traditional generators prior to the late 2020s without supportive policy mechanisms.”

In removing two coal-burning units at the Comanche station near Pueblo, Xcel Energy is adding 275 megawatts of battery energy storage. On a vastly different scale, United Power began using a 4-megawatt battery storage in late 2018.

In viewing the Craig project, Shapiro hopes to time completion to the closure of the coal plants. These projects require patience.

Shapiro already has already demonstrated great patience. In a life with many twists and turns since his upbringing in the New York City borough of Brooklyn, Shapiro by 1991 was on the Blackfeet Indian Reservation in Montana. In a paper titled E Pluribus Unum, Shapiro describes himself as a “creator, an entrepreneur, a public philosopher, a conscious citizen, a writer, and a father.”

In that paper, he says he was motivated to help the Blackfeet and, in that outlook, he began to wonder whether the steady winds of the Montana reservation could be harnessed to benefit the tribe. He quickly grasped the limits of renewable generation.

“Upon my return to New York, I immersed myself in the study of energy storage as a means of helping wind energy compete with conventional energy resources,” he explained. There were then 40 pumped-storage hydro projects in the United States among well more than 100 around the world.

Since then, in 1993, just one additional project pumped-storage hydro has been built in the United States. Many gas-fired plants were built, however, to address the need for peaking power.

Growing interest from utilities

About 2009, though, Shapiro noticed a shift.

“Renewable energy was surging, the interest in storage was starting to pick up, and more and more utilities were mentioning pump-storage in their resource plans,” he explained in a telephone interview. “So partners and I formed GridFlex to identify the best new sites in the country.”

His partners now include David Gillespie, who served a stint with Duke Energy as vice president of business development, and John Spilman, the general counsel, who has provided services to Vestas Americas, among others. Shapiro is the chief executive.

Utilities have shown much greater interest in the last two years after solar prices tumbled and, in response to consumers, many embraced 100% carbon-free goals. But the time was not lost. “We spent a lot of those years honing our knowledge about how to make the business case,” he said in a recent phone interview. “And we built relationships with equipment vendors and environmental consulting firms and others needed to move ideas into projects.”

Shapiro’s company, Gridflex, now in partnership with another company called rPlus Energies, a developer of utility-scale wind and solar, has filed with the FERC for seven sites: two in Nevada and one each in California, Colorado, New Mexico, Oregon, Washington and Wyoming.

Most, like the Craig site, are placeholders in the FERC process. Two, in Wyoming and Nevada, have moved to a second step with FERC, the pre-application stage.

In Wyoming, Shapiro last summer outlined a plan to use Seminoe Reservoir in conjunction with a new reservoir on federal Bureau of Land Management property for a capacity of 700 megawatts, somewhat larger than the Craig-Hayden proposal. The Rawlins Times reported that officials in Carbon County declined to endorse the project but were OK with the application with FERC proceeding. Cost of that project has been estimated at $1.8 billion

In Nevada, progress came earlier with the White Pine project getting press attention in Ely in 2014. But it has moved little further along than the Colorado project.

In Arizona, other developers have several proposals for even larger pumped-storage hydro projects. One using water from Lake Powell proposes to use the transmission built for the Navajo Power plant now being demolished. It has a price tag of $3.6 billion.

About the Craig-Hayden site, Shapiro declined to identify whether his company has agreements with landowners and other specific elements of what will be needed. He said he has begun outreach to utilities.

Holy Cross Energy might be one such utility. Its service territory includes Vail and Aspen but also Rifle, which is within 100 miles of the pumped-storage hydro, connected by a major transmission line. In its resource plan posted in 2020, Holy Cross specifically mentioned pumped-storage hydro as one option for being able to attain its goal of 100% renewable generation by 2030.

Jonah Levine, who wrote a master’s thesis about pumped-storage hydro in 2007, now works in the realm of biomass for Louisville, Colo.-based Lignetics.

“The evolving story is not of wind vs. biomass or even traditional resources vs. renewables,” he says. “The real question is how do we deploy these things together in the most efficient and effective ways? I don’t see that story enough. What is the best utilization of the resources to our society?

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