Pumped Storage Hydro

Historically, energy systems have been based on fossil fuels, which have given us power but also huge amounts of energy storage and flexibility. As we decarbonise the grid and replace these fossil fuels with increasing amounts of intermittent solar and wind, we will need considerably more storage to cover periods of low wind and the flexibility to ensure demand is always met in real time. Energy storage is crucial for keeping the lights on. The four existing PSH schemes in the UK were state-funded more than five decades years ago to consume and store overnight generation from nuclear, as nuclear was unable to ramp up and down to meet the changing profile of electricity demand. As was the case then, and increasingly now, PSH has a vital role in balancing our fluctuating energy demand on the grid.

PSH is ideally suited for smoothing the vast majority of fluctuations associated with intermittent wind and solar fleet. It is a proven, reliable technology that can deliver a wide range of services for the energy system across timescales from sub-second to days. With its large spinning turbines, PSH creates inertia and can respond rapidly to the second-by-second needs of the electricity grid. PSH creates resilience, can provide ‘black start’ to ‘reboot’ the grid in the instance of a blackout and can help relieve transmission constraints.

Congestion: There has been an eight-fold increase in the cost of managing congestion on the transmission network since January 2010, and this trend is set to increase to up to £3 billion per year by 2035, even after more transmission and distribution lines are built. PSH built in the right area will help relieve congestion on existing transmission networks by storing the electricity close to the source.

Curtailment: Increased congestion is leading to curtailment costs of up to £62 million per day (according to the National Audit Office). PSH situated in the right location can help prevent curtailment by providing flexible storage at optimum times.

Rebalancing: The Electricity System Operator (ESO), originally envisaged as purely a residual balancer to reposition the market, is increasingly acting more as a central dispatcher, frequently re-dispatching more than 50% of demand (compared to only 10% in 2008). The more flexibility and storage we have on the grid, the more this issue will be alleviated.

PSH projects are capable of delivering durations of tens of hours and offer the lowest cost of storage £/MWh for the crucial 10–50 hour duration segment, significantly beating batteries on costs per unit of energy stored at durations above six hours. Unlike interconnectors, PSH is fully controllable by the GB electricity market and system operator, offering intergenerational energy security. The pipeline of projects could bring significant additional value of £13.3–14.8 billion GVA and 228,700–253,700 years of employment.

PSH is a high-cost capital investment and requires a price stabilisation mechanism to enable investment to be brought forward. The BHA is calling on the government to create policy to allow this to happen in order for PSH to bring the wider benefits to the grid and consumers as shown by:

Imperial College London: If more PSH is deployed, it could deliver grid system cost savings of up to £680 million per year in 2050.

BiGGAR Economics: Detailing the economic value of PSH, a BiGGAR report found that six PSH projects currently under development could deliver £5.8 billion of investment and almost 15,000 years of employment by 2035.