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Sunny and windy weather are good news for countries that rely on renewable electricity. But both can be turbulent for the grid. Transmission operators must pay power stations to switch off when too much supply overwhelms the system.
Earlier this month SSE was fined nearly £10mn for charging “excessive” amounts to reduce output from a pumped storage hydro plant in Scotland. Although a mere rounding error against SSE’s annual profits of £2.2bn, the penalty shone an unfortunate light on a technology that once again piques investors’ interest.
The UK has four pumped hydro storage plants — or “water batteries”. The last was commissioned in 1984 before privatisation. More of this long duration storage will be needed to balance out the intermittency of renewables.
Pumped storage plants use electricity when prices are cheap to push water from one reservoir to another higher up. In the reverse, releasing water from the upper reservoir through turbines produces electricity.
Consultancy Aurora Energy Research estimates 24 gigawatts of long duration storage will be needed under a net zero electricity system. That is eight times the current installed capacity. A 2020 report by engineering group Jacobs found water batteries were the cheapest storage technology after four hours.
The high upfront costs of pumped storage are a problem. Construction takes at least five years. A new scheme planned by SSE, Coire Glas in the Scottish Highlands, will cost more than £1.5bn if it goes ahead. Drax’s expansion of an existing project will cost about £500mn.
UK ministers have promised to consult on investment mechanisms. The most appropriate is the “cap and floor” incentive used for subsea electricity trading cables. A levy on household bills underwrites a minimum revenue level; a rebate follows when revenues rise above the cap.
A “net zero” electricity system is planned in the UK by 2035. That deadline already looks challenging. This form of storage deserves more urgent attention.
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