The International Forum on Pumped Storage Hydropower: Exploring How to Scale Up Investment and Adaptation
March 24, 2022
As the use of renewables grows globally, why hasn’t pumped storage hydro been more widely adopted as a way to store energy and provide flexibility to the grid? In 2020, the International Hydropower Association (IHA) convened the government-led International Forum on Pumped Storage Hydropower to identify the obstacles to scaling up this technology, to make recommendations, and to spur investment. In this interview, Alex Campbell, the IHA’s head of research and policy, tells Hydro Leader about the forum’s findings. His key message to policymakers is to start planning now for the best options in the future.
Hydro Leader: Please tell us about your background and how you came to be in your current position.
Alex Campbell: I joined the IHA in 2020 as the head of research and policy. I lead the association’s research and policy work across the whole suite of issues of interest to the hydropower sector. Prior to joining the IHA, I held a variety of energy policy positions in the UK government for about 9 years. During that time, I worked on smart meters, international nuclear policy, and renewables auctions, including some of Britain’s large-scale auctions for offshore wind. In these positions, I was involved with a range of low-carbon electricity and climate change mitigation policies. Before my work in energy, I was in regulation for about 10 years in the technology and media sectors.
Hydro Leader: Why did the IHA launch the International Forum on Pumped Storage Hydropower?
Alex Campbell: A few years back, we looked at the situation with pumped storage hydropower and saw a bit of a conundrum. We could see a rapid increase in the use of renewables such as solar and wind—a move that is essential for tackling climate change by decarbonizing the power sector, which is one of the major sources of carbon emissions. Wind and solar have a huge amount of potential, but you need sufficient grid flexibility to make sure that the lights stay on. Ideally, you’re also capturing any excess energy generated by those forms of technology. So why hasn’t more pumped storage hydropower been built when the demand for that kind of flexibility seems to be increasing, not decreasing?
In 2020, with the support of the U.S. Department of Energy and several other governments, the forum was created to try to move the needle on pumped storage hydropower. We wanted to understand why it wasn’t being developed at scale and then to put forward policy proposals and options to change that dynamic—especially, though not exclusively, when it comes to private-sector investment.
The forum was a multistakeholder platform that involved around 80 organizations, including national governments; academics; nongovernmental organizations (NGOs); and international institutions, such as multilateral development banks and international energy agencies. We included players who have concerns about hydropower but recognize the potential benefits of pumped storage hydropower. Members were organized into working groups on markets and policies; on sustainability; and on capabilities, costs, and innovations. The forum ran from November 2020 to November 2021.
Hydro Leader: What did you find were some of the obstacles to the adoption of pumped storage?
Alex Campbell: One of the key findings was that in several markets around the world, some of the services provided by pumped storage hydropower, such as inertia services and black start, aren’t remunerated at the moment. That obviously poses a problem for the case for investment. Another problem is that in many systems around the world—even in some of the most-developed economies, such as the UK—people weren’t properly planning for future grids with high levels of solar and wind. They were only just beginning to think about what the system demands might be in a few decades’ time and how storage might come into play.
Pumped storage facilities are large projects with high upfront capital costs, similar in some ways to offshore wind farms. But if you’re trying to build an offshore wind farm in Europe, you’ve got a pretty good understanding of the prices you’re going to be paid over the 15 years or so during which you need to payback your initial costs. With pumped storage hydropower, in so many places around the world, investors don’t know that.
Hydro Leader: In addition to facilitating information sharing among the participants, did the forum aim to send a message to national regulators and international groups?
Alex Campbell: Definitely. We had policymakers and regulators involved on the steering committee, and we encouraged them to start planning ahead of time and to think about their long-term storage needs. If we get to X gigawatts of wind and solar, how much storage do we realistically need? What are the contract time limits? Are they stacked together so that you can get somebody competing across the suite of contracts on offer? It may be that one provider isn’t the most competitive on specific services but offers a better value overall. These are the types of processes that we were trying to get the policymakers to think about.
Hydro Leader: What results did the forum have?
Alex Campbell: We have seen positive changes, although I don’t want to claim that they are all because of the forum. For example, the China Renewable Energy Engineering Institute actively participated in the forum, and shortly after it concluded last year, the Chinese government came up with a forward-leaning position on pumped storage hydropower. The Chinese government’s targets on pumped storage hydropower went through the roof, to over 100 gigawatts in the 2030s. Although the UK government did not actively participate, the IHA engaged with it, and we saw the UK reframe its long-duration energy storage policy. In 2021, it issued a call for evidence, signaling an important policy change to look at market mechanisms for supporting long-duration energy storage.
Our sustainability working group took a deep dive into the environmental impacts of pumped storage hydropower. It recommended that the suite of internationally recognized tools developed by the Hydropower Sustainability Council for hydro could be applied to pumped storage as well. The tools were developed not just by industry but by NGOs and international institutions, such as the World Bank.
Hydro Leader: Please tell us about some of the research and development that the forum highlighted.
Alex Campbell: The forum identified a wide range of innovative uses for different types of pumped storage hydropower. One is the use of saltwater. A coastal cliff might be a perfect spot for a pumped storage facility using saltwater. Disused mines provide another innovative opportunity to use existing infrastructure, and as an added benefit, these facilities will often be in communities that are suffering from the closure of major employers, meaning that they have the potential to reinvigorate the economy by providing jobs.
Hydro Leader: Would you tell us about the XFLEX HYDRO project?
Alex Campbell: XFLEX HYDRO is an ambitious 18 million euro ($20 million) energy innovation project demonstrating how more flexible hydropower assets can help countries and regions to meet their renewable energy targets. The 4‑year, European Commission–funded project involves seven demonstration sites and 19 organizations and will conclude in 2023. It is the largest hydropower project funded by the European Union to date, and the IHA was instrumental in its development. Several of the demonstrations are focused on enhancing pumped storage hydropower: Grand Maison in France, Europe’s largest pumped storage plant at 1,800 megawatts (MW), and Alqueva in Portugal (520 MW) are testing hydraulic short-circuit pumped storage hydropower; Frades 2 in Portugal (780 MW) is testing variable-speed and hydraulic short-circuit pumped storage hydropower; and Z’Mutt in Switzerland (88 MW) is testing variable-speed pumped storage hydropower. While XFLEX HYDRO is focused on Europe, there will be learnings for hydropower globally in regard to improving flexibility and system support, or ancillary, services and how to optimize plant operations and maintenance. More information and reports can be found at xflexhydro.net.
Hydro Leader: What is your vision for the future of pumped storage hydropower and of IHA’s role in promoting its expansion?
Alex Campbell: We’ve now gotten to a place where most power and energy policymakers around the world understand the trajectory of wind and solar. We’ve seen costs come down so much in some of those technologies. That argument has been won. Now, we need to get those policymakers to think about what happens when those variable renewables aren’t available, when the weather conditions aren’t quite right. Batteries are great for short-term energy storage, but for those longer-duration periods, we need a backup. We don’t want blackouts, and we don’t want to fall back on gas, or even worse, coal. Our role is to get people to plan now for those long-duration storage technologies. Without that, it’s going to be difficult to get to net zero globally. The power generation sector is one area in which we already have the technology. We don’t have to rely on theoretical solutions like hydrogen-powered airplanes. Let’s just get a net-zero, low-carbon electricity system in place, along with backup services. That’s my vision, and that’s what I’ll be pushing.
Alex Campbell is head of research and policy at the International Hydropower Association. For more about the IHA, visit hydropower.org.