A POWERFUL PROMISE
In July, the Dubai Electricity and Water Authority (DEWA) announced that engineering studies had been completed on what is now set to become the first hydroelectric power station in the GCC region.
The $523mn hydroelectric plant, with a capacity to generate 250MW, will use water stored in a reservoir in Hatta, which can total up to 1.7 billion gallons. An upper reservoir will also be built 330m above the dam-level in the mountains, which will offer additional storage capacity of 880 million gallons.
The engineering studies form part of a $16mn consultancy contract handed to France-headquartered EDF Group by DEWA in June 2017. Its scope includes design, hydro-geological, geological, environmental, geotechnical, and deep excavation studies.
The move of DEWA’s wide efforts to diversify power generation sources as demand for electricity in Dubai and the entire UAE increases. DEWA also intends to boost the levels of efficiency in power production.
That’s why for the Hatta pumped storage hydro project it plans to deploy turbines using clean and inexpensive solar energy to pump water from the lower dam to the upper reservoir during off-peak hours, whereas during peak hours, the turbines will be operated using the upper reservoir’s waterfall speed to generate electricity.
This electricity will be linked to DEWA’s
grid, with overall power production efficiency expected to reach 90% through the plant’s operations, which can span 80 years.
Despite the wide adoption of other renewable energy sources such as solar and wind, hydroelectricity maintains its position as the cheapest source of electricity globally at a cost of US$0.05/ kWh, according to the International Renewable Energy Agency (IRENA).
However, its potential has never been exploited in the GCC, and that is why DEWA is keen on making its Hatta project a success to showcase the feasibility of hydro power in the region.
“Hydropower is a low-cost, reliable, and efficient energy source with huge potential for the region,” says Saeed Mohammed Al Tayer, DEWA MD & CEO. “However, estimates indicate the availability of approximately 10,000TWh/ year [terawatt-hours] of unutilised hydropower potential worldwide.”
“Hydropower is one of the most flexible and sustainable renewable energy sources [and] can be operated to provide base-load power, as well as peak-load supply through pumped-storage.”
IRENA says that the global weighted average levelised cost of electricity (LCOE) from new projects commissioned in 2017 was US$0.05/kWh from hydropower, compared with US$0.06 for onshore wind, $0.07 for bioenergy and geothermal projects and $0.10 for utility-scale solar photovoltaic.
Hydro’s LCOE varies regionally, with 2016-2017 values being $0.04/kWh in Asia, $0.05 in South America, $0.06 in North America, $0.07 in Africa, Eurasia and the Middle East, $0.10 in Central America and the Caribbean and $0.12 in Europe.
Although electricity from hydropower is already cheaper than fossil fuels, the report indicates costs for other renewables should drop, as technology improves.
“Electricity from renewables will soon be consistently cheaper than from fossil fuels,” the report says. “By 2020, all the power generation technologies that are now in commercial use will fall within the fossil fuel-fired cost range, with most at the lower end or even undercutting fossil fuels.”
Its benefits notwithstanding, hydropower development activity lags that of other renewables, says IRENA. New capacity additions of renewables in 2016 was 162GW, coming from solar photovoltaic (71GW), wind (51GW), hydropower (36GW), bioenergy (9GW) and concentrating solar, geothermal and marine (1GW).
Hydropower “is the largest source of renewable electricity generation today,” at 3,996 TWh in 2015, says IRENA in its report.
However, its share has been declining over time, IRENA, says, with hydro capacity accounting for about 75% of the world’s total renewable capacity in 2010 but only about 50% in 2016. In terms of electricity production, hydro accounted for 81% of all electricity from renewables in 2010 but 70% in 2016.
The report also acknowledges the value pumped storage hydro provides for energy storage, with most of the total energy storage
Hydropower is one of the most flexible and sustainable renewable energy sources [and] can be operated to provide base-load power, as well as peak-load supply.” Saeed Mohammed Al Tayer, DEWA
capacity globally provided by pumped storage.
“For now, pumped hydro is still the only technology offering economically viable largescale storage,” the report says. “The importance of pumped hydro storage, and indeed reservoir hydropower, is likely to grow over time as the shift to a truly sustainable electricity sector accelerates, not just for the low-cost storage it provides, but for the flexibility it brings to integrate high levels of variable renewables at minimal cost.”
Pumped-storage hydropower is the oldest energy storage technology. While estimates indicate that it represents 99% of the world’s operational electricity storage, unutilised hydropower potential worldwide stands at approximately 10,000TWh/year [terawatt-hours].
Worldwide, hydropower development grew steadily in 2017 with an estimated 31.5 GW of new capacity, according to the International Hydropower Association. IHA, in its 2017 Key Trends report, says “… this includes 6.4 GW of pumped storage, nearly twice the amount installed in 2015, and brings the world’s total installed hydro capacity to 1,246 GW. Total hydro generation for 2016 was estimated at 4,102 TWh, the greatest ever contribution from a renewable source.”
The latest information from the Global Energy Storage Database, maintained by the U.S. Department of Energy’s (DOE) Office of Electricity Delivery and Energy Reliability, says that worldwide,
There are about 352 pumped storage projects in operation and being constructed, which have a total capacity of about 183.85GW, according to the latest information from the Global Energy Storage Database.
But pumped storage hydropower remains precluded from the broader discussion on energy storage in many countries due to issues such as engineering development cost, cost versus other methods of energy storage and long lead time.
“Pumped storage hydro has been getting little attention lately because of the buzz about lithium-ion batteries. However, there are significant benefits from pumped storage that are worth recalling,” says Andy Skumanich, CEO, SolarVision Co. “Given the rapid deployment of solar and wind worldwide, there is a need for storage to mitigate the intermittency of renewable energy generators.”
“Pumped storage is an ideal candidate for utility-scale high power long duration applications. One important point that is lost is the storage does not need to be co-located with the generation source. This has often been stated by regional power grid operators, and it holds true for most regions that already have a transmission grid. There is no intrinsic advantage for colocation of any co-gen or storage element with renewables.”
We are closely monitoring the development of pumped storage and working on practical guidance to institutional investors to better define the business case for the technology.”
Richard Taylor, IHA
Within proposals for pumped storage hydro, industry analysts say that the industry could do better in informing investors, politicians and the general public that there are new innovative approaches to this energy storage system. Pumped storage no longer requires mountains to provide the topography.
With this system as part of an energy portfolio, there is a substantial opportunity to extend DER and even to develop low-cost electricity this has high reliability and dispatchability while still remaining green.
“Pumped storage projects could be unlocked through new sources of green finance, including climate bonds,” says Richard Taylor, chief executive, International Hydropower Association (IHA), UK. “However, the current lack of appropriate eligibility criteria means that investment is not flowing as it should. The overall carbon footprint for pumped storage is very competitive, but what is required is clarity in the methodology to demonstrate this.”
In some jurisdictions, there are also regulations that prohibit potential players from becoming pumped storage developers. For example, there can be barriers between a generation company and a transmission company, and pumped storage does not easily fit into that ring-fencing.
A pumped storage operator may be seen as a consumer there to provide grid services, match supply and demand, and absorb surplus, and/ or a generator selling competitively priced peak electricity.
“At IHA, we are closely monitoring the development of pumped storage and working on practical guidance to institutional investors to better define the business case for pumped storage and build investor confidence,” says Taylor.
Pumped storage hydro development needs alternative tariffs and different forms of revenue return, according to Kevin Young, president, Young Energy Services. He says that it needs to be allowed more than one form of return depending upon its form of operation and the benefits it brings to the system.
“Although utilities say it could be financed if it could be a regulated, rather than an unregulated, resource, the reality is that it needs to be recognised as a generation and transmission resource so it can be a regulated resource,” says Young.
“As an industry, we need to encourage utilities to continue to promote the need for larger scale energy storage and not to let the battery folks dominate the discussion.”
IRENA says there are many new ideas on how to expand worldwide pumped storage capacities, one of which includes installing wind turbines at existing pumped storage facilities to provide pumping power.
The topic of energy storage has gained prominence in recent years, IRENA says, and plays a key role in the design of modern electricity grids. IRENA says promising developments in other energy storage technologies may one day challenge pumped storage hydro’s near-monopoly on low-cost electricity storage. But for now, pumped hydro is still the only technology offering economically viable large-scale storage.
Pumped storage is an ideal candidate for utility-scale high power long duration applications. One important point that is lost is the storage does not need to be co-located with the generation source.” Andy Skumanich, SolarVision Co.
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