The UK hydropower industry is waiting on government action to implement a suitably supportive investment mechanism for the deployment of large-scale, long-duration storage projects, such as pumped storage. And in the interim, industry representatives are becoming increasingly vocal about the need to address such an important issue promptly.
“Many other governments, including the US, India, France, Poland, the European Union, and Australia, are putting in place such policy mechanisms,” Malcolm Turnbull, newly appointed President of the International Hydropower Association said in an open letter to UK Prime Minister Rishi Sunak. “To me, it is a no-brainer,” Turnbull continued, “and I urge you to follow suit,” he said, adding that the British hydropower industry stands ready to meet with the UK government to help resolve the matter.
Reflecting on his own time of serving as Prime Minister of Australia, Turnbull explained: “It became clear that we were rolling out large amounts of variable renewable energy without paying enough attention to the need to back up the electricity supply when the sun was not shining or the wind was not blowing. This was especially true in the state of South Australia where an enormous amount of wind power was commissioned and conventional coal-fired generation was being closed, and it was this mismatch which contributed to a state-wide blackout in August 2016. Under my leadership, the federal government’s response was to launch the Snowy 2.0 PSH plant which will provide an additional 2000MW of generating capacity and 350,000MWh of large-scale storage. Not long after, we announced the Battery of the Nation in Tasmania and recently the 2000MW Borumba PSH and 5000GW Pioneer-Burdekin PSH plants. I’m even building my own in New South Wales,” he added.
“My lesson is that governments must plan ahead,” Turnbull continued. “This over-reliance on variable renewables – wind and solar – is what I call the ignored crisis within the crisis. It is absolutely critical that we start building the storage capabilities to make renewables reliable – as we say ‘water, wind and sun, get the job done’. But the markets do not naturally support the reliability of electricity – just its generation. And the upfront costs of a hydropower plant, like PSH, are high. So, if we don’t get the frameworks right to enable rapid deployment of pumped storage, there is a real risk that decarbonisation will stall, just as it needs to accelerate.”
Resource adequacy
The question is, the British Hydropower Association’s CEO Kate Gilmartin recently asked, what do we do when the wind isn’t blowing nor the sun shining and as we move away from gas peaking plant that currently fills those gaps?
“This is the ‘resource adequacy’ issue and it is a big unresolved problem for the UK in its ambition to decarbonise the grid by 2035 and become energy secure,” she said.
With energy security being propelled up the policy agenda due to the sharp increase in energy prices caused by a post-Covid surge in worldwide gas demand and the illegal invasion of Ukraine by Russia, alongside the urgency of the ever more alarming climate crisis, it is sobering, dismaying and a stark reminder of the consequences of inaction or indeed inadequate and delayed action, Gilmore added.
“These factors compound the need and imperative for the UK to unhitch itself from the global fossil fuel market and scale up the deployment of energy generation from our huge indigenous natural resources that we can tap into through hydropower, tidal range, tidal stream, wind and solar,” the CEO of the BHA said, adding that all technologies need to be in the mix.
“Hydropower and PSH are proven, reliable technologies that have longevity, with installations lasting well over 80 years. We have pipelines of projects that can be deployed and,” according to Gilmore, “we estimate that there is 1GW of hydropower and at least 10GW of PSH potential utilising a supply chain that is 80% embedded within the UK. However, with high initial capital costs and longer paybacks, these technologies are reliant on stable price signals within the energy market, something that we don’t have.
The BHA believes that such a market failure within the energy sector needs correction through policy levers and the creation of longer-term price mechanisms. While cost comparisons of energy across different low-carbon technologies need to stop. Instead, the association believes they should be compared with the high carbon generation they are replacing.
“Renewable energy technologies all do something different on the grid,” Gilmore explains. “Hydropower should be compared to the cost of a gas peaking plant, which at £250 MWh is much more expensive than hydropower. 1GW of hydropower could replace 1GW of gas peaking plant in the expensive capacity market or finally take off that 1GW of coal that is still loitering on the grid.”
In another open letter to the UK Government, Scottish Renewables joined forces with the BHA and explained that by investing in pumped storage the government would:
- Reduce annual constraint costs – These are payments made to electricity generators to balance the supply and demand of electricity generation and reached £1.94 billion in 2022. PSH can mitigate these costs by allowing for greater use of generation in constrained areas as well as reducing the need for costly grid reinforcement. If deployed, PSH could deliver system cost savings of up to £680 million per year by 2050.
- Help deliver energy security – The recent energy price crisis demonstrated that the transition to home-grown renewable energy is the only sustainable path to energy security and PSH is a tried and tested technology that can deliver this by storing energy for when it is most needed.
- Make the UK a more favourable investment destination – With increasing global competition for clean energy investment, in particular the US’ Inflation Reduction Act and the EU’s Green Deal Industrial Plan, developers urgently need the UK government to implement a suitable investment framework to secure low-cost financing for their PSH projects.
- Reduce consumer bills – Speeding up the delivery of long-term energy storage is essential to deliver the UK’s net-zero energy system – the best way of reducing energy bills for consumers in the long term.
Andrew MacNish Porter, Policy Manager at Scottish Renewables, said: “A recent report which Scottish Renewables commissioned from BiGGAR Economics found that six projects currently under development in Scotland will more than double the UK’s pumped storage hydro capacity to 7.7GW, create almost 15,000 jobs and generate up to £5.8 billion for the UK economy by 2035.
“We need to get these shovel-ready projects into construction right away and urge the Prime Minister and the UK Government to deliver an investment framework that will unlock the huge value of pumped storage hydro as soon as possible.”
“We have a massive challenge ahead,” BHA’s Gilmore added. “The stakes are high but the benefits to the economy from decarbonising are immense. Hydropower technologies are the workhorse of renewable energy, powering away decade after decade. We need the political will to drive forward the policies that can enable these technologies to deploy and play their important part in providing a decarbonised, stable, operable grid and lasting energy security.”
If the UK has ambitions to become the “Saudi Arabia of wind power”, Turnbull says that action is needed swiftly, and he is determined to amplify the call for pumped storage hydropower.
Water infrastructure
Meeting net zero greenhouse gas emissions to mitigate the effects of climate change, while keeping the taps on, improving the quality of waterways, and reducing flooding in the face of changing weather patterns, means that the UK’s water infrastructure system will face enormous challenges over the next 30 years and beyond. If unaddressed, the Institution of Civil Engineers (ICE) highlighted recently in a roundtable discussion, that such problems will only become more severe due to pressures from population growth and climate change.
Currently the UK uses about 14 billion litres of water per day and will need 4 billion more by 2050. The UK government produced its Plan for Water in April 2023 to deliver clean and plentiful water and is built around a catchment approach to managing the water system, using regulatory powers and strategic policy approaches. While there has been progress in improving water quality, it is recognised that standards and performance must keep improving to anticipate and prepare for future challenges and so, ICE asked its members, is regulatory reform needed?
The current model of water regulation was developed in the late 1980s and early 1990s and has yet to evolve at the pace required, while regulatory duties for water sit across multiple government departments and agencies. As attendees outlined at the roundtable, these duties must be better joined up to achieve the right outcomes.
The water sector of the past was characterised as being ‘low risk, low return’, with minimal innovation, and little capital investment but, overall, in a stable state. This has since changed: a new message is needed to attract equity as this is not what the water industry of the future will look like. But the good news is that there is unlikely to be a shortage of finance – investors still see water as a safe bet, and water companies have done a strong job of attracting finance in the past.
Discussions at the ICE roundtable focused on complacency among water companies, particularly when understanding the current health of their asset base and how it will respond to shocks. Investment is required to understand the existing asset base and prioritise where interventions need to be made.
Longer-term planning is also required. Five-year price review periods have inhibited such a necessary long-term approach to water infrastructure system management and the impact of this can be found in water supplies. The UK’s population has grown by approximately 10 million people since the last reservoir was completed in 1991 and although it was described as an impressive feat that supply has been well maintained in that time, new reservoirs are now badly needed. The National Infrastructure Commission has advised that 16 reservoirs will be required over the next 25 years to secure the UK’s drought resilience.
Leadership in the water sector is also considered to be lacking; there is no entity to drive change and actively monitor progress, while the supply chain for delivering transformative solutions like sustainable drainage systems at scale is simply not there. The sector overall is disparate: there is unity of purpose, but no unity of direction and the question was asked if a water strategy could provide the solution.
Attendees also raised the need to promote greater public awareness of the water stresses the country will face as climate change and population growth pressures mean the public must reduce their water use by 30%.
Significant changes
The British Dam Society also acknowledged recently that the country’s reservoir industry is currently going through significant changes with a call for increased resilience within water supplies and greater demand for renewable energy.
With at least ten reservoirs or water storage projects under investigation or underway, including the first large-scale pumped storage project for 30 years at Coire Glas, BDS provided project updates on some of these schemes at one of its recent seminars.
Portsmouth Water’s Ruari Maybank is the Project Director for the Havant Thicket Reservoir which is described as an environmentally led project that won’t address the challenges of population growth or the impact of climate change, but will protect globally rare chalk streams in Hampshire.
In 2017 Southern Water agreed to reduce abstraction from these chalk streams by up to 18 Megalitres a day through addressing customer consumption and leakage in pipes, but realised that it still required more sustainable sources to protect such rare habitats.
“And this where Portsmouth Water comes in,” Maybank explained. “As we are lucky enough to manage the largest freshwater springs network in Europe which is used to provide drinking water.”
Havant Thicket Reservoir provides an opportunity to capture surplus water which would otherwise travel a short distance out to sea, and capture and store it until needed in times of drought or emergency.
After considering 70 different locations the chosen one was considered ideal due to its close proximity to the freshwater spring, meaning building pipe infrastructure and pumping water up to the reservoir would be cheaper. Fewer trees on the site also meant it had a lower environmental impact and favourable geographical considerations included its location in a shallow valley rich in London clay. This can be used to build the embankment and reduce project costs, and minimise its construction carbon footprint with less vehicles to disrupt local roads and communities.
Maybank said that the project is about more than the reservoir itself as 12km of pipes, pumping stations and a new pipe network need to be constructed to help transfer treated water towards an existing service reservoir, to enable the release of water from their network to Southern Water’s to supply their customers.
Planning permission for Havant Thicket was received in 2020. From 2023-6 clay will be dug out and the reservoir built. It is hoped that by 2029 the reservoir will be filled with water.
Key lessons that Portsmouth Water have learned from this project include:
- It’s never too early to appoint a construction engineer.
- Market engagement needs to be included in the reference design. Projects are delivered by people and not contracts or agreements and so stakeholder engagement is absolutely crucial.
- Start environmental compensation early. Portsmouth Water started in 2019 and planted over 6000 trees and created wildlife corridors. This was done before planning permission was secured, not as it had to be done but as felt like the right thing to do. This gave the new habitat a chance to mature and provide a home for wildlife affected by construction when it started.
Maybank added that the company is mindful this is the first of several reservoirs to be built in the region and they are keen to learn from the wider professional community and share lessons learned. With this in mind, it has signed a memorandum of understanding with the University of Portsmouth to provide a learning legacy.
Mark Malcolm, Programme Director for major infrastructure at Anglian Water, also spoke about plans for two new raw water reservoirs in East England, similar in size to Grafham Water which has an area of 6.3km2, maximum depth of 21m and a maximum volume of 57Mm3.
He described the new reservoirs as significant assets of about 50Mm3 that will not just water supply but also support the farming industry and become a catalyst for growth in the East of England.
The Fens Reservoir will take about five to seven years to construct, with water supply anticipated by 2035-7, and the Lincolnshire Reservoir will take six to eight years with water supply by 2039-41.
Factors driving the need for reservoirs in the East of England include the fact that this unique low-lying region is one of the driest in the UK, with a third less rainfall than the country average, plus one of fastest growing parts of the country with 20% population growth predicted by 2050. So, in the face of climate change, water supplies need to be protected.
While Georgina Seely, Head of Strategic Resources Engineering at Thames Water spoke about plans for a new reservoir in Oxfordshire. Several options are currently being looked at and the largest one will be 150Mm3 consisting of a traditional embankment design, about 15-20m high with a maximum water depth of 33m. It is hoped that planning consent will be granted by 2030 and water should be available by 2040. For the first ten years, 30% of the water will be for Affinity customers, 30% for Southern Water and 40% for Thames Water customers.
Seely said that as the project develops Thames Water hopes it will enhance the environment and become an asset to be proud of in the future.
This article first appeared in International Water Power magazine.
