Pumped Storage Hydro

NREL researchers develop detailed cost-estimation tool for pumped storage development

NREL researchers develop detailed cost-estimation tool for pumped storage development
Lake Elsinore in California is the site of a potential pumped storage project (photo courtesy Nevada Hydro)

Researchers with the National Renewable Energy Laboratory (NREL) have created a new cost-estimation tool that can evaluate the potential construction and labor costs associated with closed-loop pumped storage hydropower plants.

As the U.S. transitions to a clean power grid, researchers are searching for the best ways to store energy to use when winds slow down, clouds block the sun and the grid needs a boost. Batteries often run best for short distances. Pumped storage hydropower may be older technology but can outlast the competition, often storing energy for eight to 12 hours or more. Utility-scale batteries are often too expensive if they are built to store more than four hours of energy. Pumped storage hydropower is the biggest source of grid-scale energy storage capacity in the U.S., accounting for about 96% in 2022.

“Pumped storage hydropower is maybe the most promising energy storage solution we have to achieve the huge ramp up needed to achieve a clean electricity sector,” said Daniel Inman, a researcher at NREL who studies the economics behind these energy storage technologies.

Few new pumped storage hydropower facilities have been built since the 1970s, in part because these technologies often come with high upfront costs and reservoirs can impact the environment, especially if they are connected to a river. Today, investors are considering a more environmentally friendly option: closed-loop systems, which are separated from naturally flowing waterways.

But the decades-long gap since a pumped storage facility was last constructed in the U.S. makes it difficult to predict how much closed-loop facilities might cost, especially for people and organizations without much experience building these types of plants. That means developers and grid planners lack the data needed to make informed decisions about how many new facilities the country could or should build to support its evolving grid.

That is why Inman — along with fellow NREL researchers Stuart Cohen, Vignesh Ramasamy and Evan Rosenlieb — created the new cost-estimation tool.

Closed-loop pumped storage hydropower has been overlooked in the past decade, despite the fact that the technology protects ecosystems better than most traditional open-loop plants (which are built alongside rivers), Inman said. Pumped hydro facilities also provide grid inertia. If a snag cuts off power temporarily, the turbines continue spinning, helping to bridge that power gap.

In 2017, researchers at Australian National University published a basic cost estimation tool for pumped storage hydropower. Their tool provides broad, generic cost estimates using a few core characteristics of pumped storage systems, but the NREL model is far more detailed. With this new tool, users can select a wider range of desired system characteristics and account for local geology, labor rates and inflation, among other factors.

“This tool allows potential project developers to get a ballpark figure for what a particular facility might cost,” Inman said. “And a more realistic cost estimation would allow us to develop capacity expansion modeling results that are more realistic.”

For grid planners, this tool could provide a more accurate picture of how many pumped storage hydropower facilities could reasonably be built over the coming decades — an important metric in understanding what kind of energy storage the future grid might have or need.