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Released July 23, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The last time a new pumped-storage hydroelectric project began operating in the U.S., Bill Clinton was nearing the end of his first term as president. Martin Scorsese's "Casino" was playing to packed movie theaters. Gasoline cost an average of $1.21 a gallon and a McDonald's hamburger was yours for about $1.
But those who believe in building new pumped-storage hydropower (PSH) projects have at least three reasons to be more optimistic than ever that dirt soon will be turned on a proposed U.S. PSH project. Those reasons were offered by speakers at last week's HYDROVISION International 2024 conference, held in Denver, Colorado and attended by about 1,000 people. The event was organized by Clarion Energy LLC (Clarion, Pennsylvania).
Two of the reasons involve money. A third has to do with global warming.
For more on the HYDROVISION International 2024 conference, see July 22, 2024, article - Hydropower: Is the Glass Half Full or Half Empty? Conference Panelists Offer Different Perspectives.
In a July 17 conference breakout session, Scott Flake, principal consultant at Scott Flake Consulting, Incorporated (Sacramento, California), told attendees that during the 2022-2023 legislative session, California enacted a law establishing a Central Procurement Entity (CPE) that would act on behalf of the state, and its electric customers, to contract with developers of PSH and other proposed long-lead-time renewable generation projects. The law designated the state's Department of Water Resources (DWR) (Sacramento) as the CPE.
Having a state entity with the legal and financial authority to enter into contracts with developers for projects that often cost over $1 billion is a critical hurdle to clear, he said. Most proposed PSH projects sit on the shelf because no single entity wants to take on the enormous financial risk of building one.
Flake is an independent engineering analyst with a long career developing power projects, including nearly a decade at the Sacramento Municipal Utility District (SMUD) (Sacramento).
California Assembly Bill (AB) 1373, signed into law October 23, 2023, was enacted to help the state to achieve its ambitious mandate to make the state 100% carbon neutral by 2045, Flake said July 17. AB 1373 had multiple goals, including:
"PSH will play a role in California's carbon-neutral future," Flake predicted July 17. "The state can't get to 100% carbon neutrality without PSH and other long-lead-time renewables. The real value of PSH is not the energy they generate, it's the storage they provide."
Industrial Info Resources is tracking 84 proposed PSH projects in the U.S. worth about $180.35 billion in aggregate. Although a few projects have been announced recently, many of these active projects have been delayed for years. Arizona, California, Michigan and Alabama are the states with the largest dollar-value of PSH projects under development. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a full list of project reports.
Click on the image at right to see a graphic of the 10 states with the greatest dollar value of proposed PSH projects.
Any long-lead-time renewable generation built under the auspices of AB 1373 requires it to use renewable generation for its onsite power needs--which, in the case of PSH, is considerable. "There are plenty of opportunities to pair a PSH with solar or wind generation," Flake observed. That law offers PSH a path forward, he added.
"Permitting a PSH or other long-lead-time source of renewable generation can take years and tens of millions of dollars," Flake said. "That's why a state agency needs to step in."
Other speakers at the HYDROVISION conference observed that many if not most PSH projects built overseas have been backed with national or state government support.
In addition to California designating a state agency as a Central Procurement Entity for long-lead-time renewable generation, Flake said he was optimistic about U.S. PSH development because technology companies are investing heavily in clean energy. Energy storage is widely seen as a critical aspect of the fight against global warming. PSH provide both renewable generation and the ability to store electricity when it is not needed.
"Technology companies are investing in renewable energy," he said, referencing Apple Incorporated (NASDAQ:AAPL) (Cupertino, California), Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) and Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California), parent company of Google.
It was unclear if the technology companies Flake mentioned were investing specifically in PSH projects, but they have been investing in renewable energy generation, renewable energy credits (RECs) and battery energy storage projects for years--both for their own facilities and their suppliers' plants. And, in an interview, he said energy-gobbling artificial intelligence (AI)-equipped data centers such as those operating and under development by those and other technology companies, "will cause companies to invest in PSH for the storage capacity," which they need more than green electrons or the RECs.
Although Flake did not specifically address global warming as a driver for PSH development, other speakers at the HYDROVISION 2024 conference did. Carbon dioxide (CO2) emissions from the energy sector continue to increase on a global basis, led by nations in the developing world, whose emissions growth far exceeds the reduction in emissions from advanced economies.
Several speakers also remarked that technology companies that have extolled their clean energy credentials have found their track records reversed by the surge of electric demand created by their data centers. In its annual environmental report released this summer, Google said its CO2 emissions jumped 48% over the last five years due to surging electric demand from its AI-equipped data centers. Sharply rising demand for electricity, some portion of which is met through utility-supplied power generated from hydrocarbons, is undoing years of effort technology companies have made to decarbonize their electricity supply.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
But those who believe in building new pumped-storage hydropower (PSH) projects have at least three reasons to be more optimistic than ever that dirt soon will be turned on a proposed U.S. PSH project. Those reasons were offered by speakers at last week's HYDROVISION International 2024 conference, held in Denver, Colorado and attended by about 1,000 people. The event was organized by Clarion Energy LLC (Clarion, Pennsylvania).
Two of the reasons involve money. A third has to do with global warming.
For more on the HYDROVISION International 2024 conference, see July 22, 2024, article - Hydropower: Is the Glass Half Full or Half Empty? Conference Panelists Offer Different Perspectives.
In a July 17 conference breakout session, Scott Flake, principal consultant at Scott Flake Consulting, Incorporated (Sacramento, California), told attendees that during the 2022-2023 legislative session, California enacted a law establishing a Central Procurement Entity (CPE) that would act on behalf of the state, and its electric customers, to contract with developers of PSH and other proposed long-lead-time renewable generation projects. The law designated the state's Department of Water Resources (DWR) (Sacramento) as the CPE.
Having a state entity with the legal and financial authority to enter into contracts with developers for projects that often cost over $1 billion is a critical hurdle to clear, he said. Most proposed PSH projects sit on the shelf because no single entity wants to take on the enormous financial risk of building one.
Flake is an independent engineering analyst with a long career developing power projects, including nearly a decade at the Sacramento Municipal Utility District (SMUD) (Sacramento).
California Assembly Bill (AB) 1373, signed into law October 23, 2023, was enacted to help the state to achieve its ambitious mandate to make the state 100% carbon neutral by 2045, Flake said July 17. AB 1373 had multiple goals, including:
- Accelerating the development of offshore wind
- Stimulating the development of long-duration energy storage
- Supporting the development of new geothermal power plants
- Reducing the project development risks of long-lead-time renewable generation, such as PSH, and
- Allowing the state to invest, build, and procure at scale for PSH and other renewable resources with long lead times
"PSH will play a role in California's carbon-neutral future," Flake predicted July 17. "The state can't get to 100% carbon neutrality without PSH and other long-lead-time renewables. The real value of PSH is not the energy they generate, it's the storage they provide."
Industrial Info Resources is tracking 84 proposed PSH projects in the U.S. worth about $180.35 billion in aggregate. Although a few projects have been announced recently, many of these active projects have been delayed for years. Arizona, California, Michigan and Alabama are the states with the largest dollar-value of PSH projects under development. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a full list of project reports.
Any long-lead-time renewable generation built under the auspices of AB 1373 requires it to use renewable generation for its onsite power needs--which, in the case of PSH, is considerable. "There are plenty of opportunities to pair a PSH with solar or wind generation," Flake observed. That law offers PSH a path forward, he added.
"Permitting a PSH or other long-lead-time source of renewable generation can take years and tens of millions of dollars," Flake said. "That's why a state agency needs to step in."
Other speakers at the HYDROVISION conference observed that many if not most PSH projects built overseas have been backed with national or state government support.
In addition to California designating a state agency as a Central Procurement Entity for long-lead-time renewable generation, Flake said he was optimistic about U.S. PSH development because technology companies are investing heavily in clean energy. Energy storage is widely seen as a critical aspect of the fight against global warming. PSH provide both renewable generation and the ability to store electricity when it is not needed.
"Technology companies are investing in renewable energy," he said, referencing Apple Incorporated (NASDAQ:AAPL) (Cupertino, California), Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) and Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California), parent company of Google.
It was unclear if the technology companies Flake mentioned were investing specifically in PSH projects, but they have been investing in renewable energy generation, renewable energy credits (RECs) and battery energy storage projects for years--both for their own facilities and their suppliers' plants. And, in an interview, he said energy-gobbling artificial intelligence (AI)-equipped data centers such as those operating and under development by those and other technology companies, "will cause companies to invest in PSH for the storage capacity," which they need more than green electrons or the RECs.
Although Flake did not specifically address global warming as a driver for PSH development, other speakers at the HYDROVISION 2024 conference did. Carbon dioxide (CO2) emissions from the energy sector continue to increase on a global basis, led by nations in the developing world, whose emissions growth far exceeds the reduction in emissions from advanced economies.
Several speakers also remarked that technology companies that have extolled their clean energy credentials have found their track records reversed by the surge of electric demand created by their data centers. In its annual environmental report released this summer, Google said its CO2 emissions jumped 48% over the last five years due to surging electric demand from its AI-equipped data centers. Sharply rising demand for electricity, some portion of which is met through utility-supplied power generated from hydrocarbons, is undoing years of effort technology companies have made to decarbonize their electricity supply.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
