South Australia pumped hydro needed to balance renewables

Pumped Hydro Energy Storage (PHES) projects are a rare breed, so its came as a surprise that two came along at once, one last week that after 11 years in the US finally got an investor (but not yet a Power Purchasing Agreement) and here is the Australian Renewable Energy Agency (Arena) chasing one with $40 million of cash on offer.

Time and time again people tell us that the only energy storage that is relied upon by modern grids is from Pumped Hydro, and yet they consistently fall foul of permission due to the hoops companies have to jump through over water security.  Arena is now looking at projects already developed in South Australia on behalf of the Australian government.

The idea is to fast track development of South Australia’s first PHES plant and it is looking for projects above 200 MW in capacity ready for financial close by June 30, 2020.

Given the popularity of pumped hydro among electrical utilities, if any of these can sort out their permits and a PPA by June 2020, they are unlikely to have trouble finding funding. In fact Arena says it has four such projects which it feels are ready to throw the switch on and that it will invite those developers to put forward proposals and timing for their financial close and details of their funding needs. It will then go into diligence and make an award in late 2019. Arena says its approach is designed to ensure the best project proceeds with the least Government support.”

Arena also says that it will work with the Australian Government’s Underwriting New Generation Investments (UNGI) program, which itself has a dozen shortlisted projects which includes six PHES projects (of which three are in South Australia) – surely there must be an overlap there, there can’t be 7 separate schemes ready to fly in South Australia.

There is a further $50 million available from the South Australian Government’s Grid Scale Storage Fund (GSSF) as well.

Renewable oriented South Australia is supposed to need large-scale storage like PHES to supply system strength, energy reliability and inertia to the region. A 200 MW plant must balance variability in the South Australian National Electricity Market region, and offer stability services and capacity storage for six to eight hours duration.

“With 50% of total energy generation in South Australia coming from variable renewable energy in 2018, and an expectation that this will increase in the next two years, there is an increasing requirement for energy storage to firm and balance the system in that state,” said Arena CEO Darren Miller.

Arena has done this before and supported PHES feasibility for Tasmania’s Battery of the Nation initiatives and PHES facilities in Queensland and New South Wales. Not a whiff of Lithium in sight.