De-Risking Pumped Storage working group with Bechtel

Chris McMonagle is Global Business Development Manager for Bechtel Infrastructure's heavy civil EPC (engineering, procurement, and construction) business. He is also Chair of the International Hydropower Association working group on De-Risking Pumped Storage.

Energy crisis. Energy security. Climate change. Net Zero. A combination of unprecedented demand, geopolitical tensions, and social drivers have created the perfect storm which is further compounded by the rapid increase of global temperature and climate disasters. One of the responses from Governments across the world to mitigate these challenges has been to promote the rapid development of renewable energy. However, there is a problem with harnessing the full potential of renewable energy.

As a grid introduces more of it, the amount of intermittency of generation increases. The wind does not always blow, and the sun does not always shine when we need power. Hydropower can provide back-up, but we need batteries to store the energy that renewables are producing and then release that energy when renewables are not producing power. This balances the system.

When people hear ‘battery,’ the most common type is lithium batteries. While lithium batteries will have a place in the market to meet short-duration storage needs, they do not solve the renewable energy problem. This needs long-duration storage. To put it bluntly, it is impossible to achieve an efficient, reliable, net zero power grid without combining renewables with large-scale, long duration energy storage. This is where ‘pumped storage hydropower’ (PSH) comes in.

Despite PSH being a key enabler of the efficient, clean, affordable, reliable energy grids that we all want to see in the future, there is a second problem. Projects are being held back and are not getting through development and into construction. Outside of the hydro industry, there is little awareness or understanding of what PSH is and why it is so important.

PSH is a ‘water battery,’ not a power producer like conventional hydropower. A water battery has two reservoirs, one low down, one high up. When excess power is being produced by wind and solar, rather than being wasted, that power is used to pump water up to the higher reservoir. When wind and solar are not producing power, that water is then released into tunnels to pass through a turbine, ending back into the lower reservoir for the cycle to be repeated. The duration for which power can be produced by the water battery is only limited by the size of the reservoirs and volume of water. PSH currently accounts for over 95% of global energy storage capacity.

PSH projects take multiple years to develop and construct. Governments across the world need to expedite enabling policies now if they want to meet commitments for security of supply, lower electricity costs, and ensure the sustainability of the energy sector.

The third problem affecting renewable development is that PSH projects are major, complex infrastructure projects. Research demonstrates that the hydropower industry suffers from cost and schedule overruns more acutely than other project types.

At Bechtel we feel very strongly about this market – it is too important to fail. We have 125-years’ of history with a focus on major, complex developments, and have been delivering hydropower projects for over eighty years. This gives us valuable experience of assessing and learning from the root causes of declining performance. It also helps us to address the unique challenges being faced. We are on a mission to set PSH projects up for success.  

The International Hydropower Association (IHA) and Bechtel are addressing these problems through the De-Risking Pumped Storage working group, created to bring relevant parties together and develop an industry guidance note. The working group is comprised of industry veterans and new entrants, with experience in multiple global markets - representing utilities, developers, engineers, constructors, OEMs, lawyers, academics, financiers, and policy advisors. This provides a broad industry perspective to enable the working group to tackle the challenges with multiple perspectives in mind.

At initial sessions we have discussed government policy, government support mechanisms and market structures, and are looking at issues related to insufficient planning, design, risk assessment and mitigation planning, contracts, and at how to minimize the interface and constructability challenges.

Our aim is to produce a concise and relatable guidance note that helps stakeholders to understand what good looks like and set out why water batteries are the solution to achieving global net zero targets securely, whilst keeping the lights on. Pumped Hydro Storage is ‘infrastructure with a purpose,’ we need to get it right.

Learn more about pumped storage hydropower.

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