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Pumped hydro storage: the neglected, stifled no-brainer

Geoff Davies

Pumped hydro storage is the ideal complement to wind and solar electricity generation: versatile, modest in scale, cost and build-time, little environmental disruption, mature component technologies, few toxic chemicals, durable. Yet it is usually overlooked in mainstream discussion in favour of gas-fired power stations, batteries and the nuclear zombie. It is also shackled by out-of-date regulations, short-sighted financial criteria and business models of privatised entities.

Pumped hydro is a straightforward way to store energy and to regenerate electricity when required. It comprises two ponds, one high and one low, a pipe between them and a pump/generator at the lower end. When electricity is abundant, water is pumped from the lower to the higher pond, thus storing energy. When electricity is scarce, water can be run down through the generator to regenerate electricity, and the water then held in the lower pond, to be used again.

Crucially, the system does not have to be on a watercourse, in fact it is much simpler if it is not. The ponds are much smaller than giant water-supply dams and the water is recycled, so the system requires only small amounts of water to replace losses.

Credit: original source (refs 1)

Snowy 2.0 is the worst possible way to do pumped hydro. It requires 17 km of tunnelling and expensive links to the grid, it pollutes the national park, is already well behind schedule and has suffered huge cost blow-outs. It diverts huge resources, perpetuates misconceptions about the essence of pumped hydro, and gives it a bad name.

Engineers had decided years before that Snowy 2 would not be financially viable, but Prime Minister Malcolm Turnbull needed a gigabuck announceable to pretend he had some kind of global warming strategy. Perhaps subsequent prime ministers have let it run because it is so slow and expensive it does not seriously threaten the fossil fuel industry.

Groups at University of Melbourne and ANU have identified hundreds of sites suitable for medium-scale pumped hydro (a few hundred megawatts). If 12 or 20 of those were located around the country, closer to grid connections and population than is Snowy 2, a more versatile storage system could be more quickly built for less money, pollution and disruption.

Once built, pumped hydro systems can be brought online within minutes or less. They could easily cover the limited peak times for which gas-fired plants are often mooted. There should be no more talk of building gas-fired power stations to cover limited peak times.

They can perform much of the role to stabilise the grid that batteries have been found to excel at. If a quicker response is required (seconds or milliseconds) then a quite small battery plant could be installed in conjunction with pumped hydro.

There are some government programs to promote a few pumped hydro systems, but they are slow to emerge and they play little role in national discussions. The federal government seems to have little appreciation of their potential to quickly and economically transition our electricity system. There need be no fossil fuels in our electricity system within the decade. Or perhaps Labor isn’t serious about reducing emissions.

Public discussion is heavily skewed by vested interests, the gas and battery industries and the wannabe nuclear industry. Nuclear is laughably inappropriate: slow, extremely expensive, dirty, dangerous, a potential route to nuclear weapons. The latter aspect, bombs, is presumably a major hidden agenda behind the otherwise ludicrous promotion of nuclear power.

Big, centralised electricity generation plants are from an era now past. Sun and wind spread across the landscape. It makes sense to capture their energy locally and use it locally. That is one reason why regional pumped hydro systems make sense. Smaller, localised systems also make sense for communities currently near the end of long power lines. Such local systems would also enhance resilience during fires and other emergencies.

Attempts to promote a small pumped hydro system for the small town I live in (Braidwood NSW, which was threatened during the Black Summer fires) have met multiple obstacles, despite its clear advantages. Major investment funds demand a 7% pa return, in other words a ten-year payback. Detailed modelling of our system fell short of this criterion.

Yet a pumped hydro system has a long life: at least fifty years is quite plausible. Payback over twenty years would be financially quite feasible, and over a fifty-year life the system would pay off handsomely. Our short-sighted financial system is not interested. A community might raise funds but that is not easy and is some risk.

Our situation is prime for government investment or support. The original Snowy Mountains Scheme was of course a government-funded project, featuring a big up-front investment and a long payback. But governments don’t want to do that any more despite evidence all around us of the failure of privatised services that used to be supplied by governments.

The Australian Renewable Energy Agency (ARENA) might provide support funding for a medium-scale system (over 30 MW), but not for our small system (5-7MW). They also are driven by financial-system criteria, and ideology, rather than longer-term net benefit.

Another obstacle is that retail prices are closely regulated and the potentially lower cost cannot be passed on to our local customers. That regulation is from the big, centralised era, so people distant from giant power plants don’t pay excessively for transmission. It makes no sense in the era of wind and sun.

If we want to use the existing poles and wires to deliver locally-generated electricity over short distances we pay an extra 12c/kW hour in each direction, removing our price advantage and delivering extra profit to the effectively privatised entity (Essential Energy) that now manages them. Had the NSW government retained control of the poles and wires it would be easier to design policies to facilitate local, clean electricity.

At every level, political, financial, ideological and bureaucratic, the clear advantages of pumped hydro energy storage are stifled. Our communities, our society and the planet need this straightforward, non-polluting energy storage option to be unshackled and rapidly promoted.


Geoff Davies

Dr Geoff Davies is a retired scientist, economics critic, & author of Economy, Society, Nature & Little Green Economics Book.

Geoff is an ERA member.

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