The future is looking bright for the pumped storage sector in the UK. George Milne from MWH explains why the country is experiencing a momentum shift towards this mode of hydropower. Suzanne Pritchard reports.


“Speaking as an engineer, pumped storage projects are very interesting. We like to be involved in them” says MWH energy director George Milne. It’s good news for Milne and his colleagues then that there is plenty of opportunity in this sector, with a variety of interesting plans currently taking shape in the UK.

“A number of big players in the UK are looking at pumped storage schemes,” Milne explains. “Both new build and retrofit schemes are being considered with the opportunity to improve availability of existing plant through conversion to pumped storage for a relatively small investment.”

Pumped storage schemes have historically been viewed as larger scale projects but a new trend could be emerging. Milne says that MWH is looking at a relatively small 50MW pumped storage scheme for a private developer to convert existing assets and infrastructure for retrofitting a pumped storage project.

“The developer believes that they have got a commercial model that can work,” Milne explains. “We’ve also been talking to other developers who are thinking about pumped storage,” he adds. “Some ideas are perhaps a little more challenging than others but there is an increasing interest in pumped storage; particularly in converting existing infrastructure to this mode of operation.”

Maximising opportunities at existing resources is proving to be a key consideration for some water utility clients in the UK, and companies are beginning to embrace the advantages they already have. “If you can integrate renewable technology within this,” Milne tells IWP&DC, “you can add a lot more value to the project. There is generally a lower environmental impact with pumped storage and the way it operates. As you transfer water back and forth, to some extent, its environmental footprint is reduced. This may help overcome any perceived obstacles to the development of renewables such as hydropower.

“These utilities have a large pool of assets, and we can offer them a pragmatic approach to help develop these on a small scale. There is a lot of opportunity out there to look at and apply hydro generation to existing infrastructure for water utility clients. There’s a great sense of value in this.”

A lot of the schemes Milne mentions are on a smaller scale. He believes there is a wealth of potential for small development in this area of the UK market place at the current time. The uptake of feed-in tariffs has been a big driver, aided by a range of government studies and published guidelines.

“There are still challenges, and cost benefits remain quite sensitive and need careful consideration,” he says, “but there is a lot of interest and enthusiasm. Various studies have identified there could be up to 1.2GW of opportunities for small hydro in the UK. So there is the potential out there.”

MWH would like to see the opportunity for a mix of scale of pumped storage schemes. The company believes that existing infrastructure can support small scale development, and these schemes can work integratively with other technologies on a “local” basis. “This really could be a future development,” Milne reiterates.

Energy storage

MWH is a major player in the pumped storage industry and has always had a scheme on its books. Ongoing investment in the US means that this region has been important for the company. “The technology has always been there and has always been part of the energy mix,” Milne says.

The uptake of pumped storage in the States has perhaps been driven more by the demand for energy, Milne notes. Whereas in the UK, the more recent focus on meeting renewable obligations is helping to drive an increasing interest in this sector of the hydro industry. On the back of this comes a greater desire to iron out economic wrinkles which can hinder pumped storage development.

“Pumped storage is a proven technology that can deliver with real commercial return but its economics are a little bit more complex,” says Milne. “There are a lot of themes that need to be built into the commercial basis for these projects. To some extent it is still a bit unclear as ongoing market reform in the UK means we have yet to determine how things will shape up.”

There is still a speculative component to pumped storage projects and the mechanisms that support them. More clarity is required about what will happen with the electricity market reform in respect of the capacity, mechanism, low carbon support and network balancing activities.

“You can’t guarantee that you’ll have sufficient differentials over any one period in time to make your operation economic,” explains Milne. “Traders are getting involved in assessing if they can buy enough power for pumping and then generate power at a high enough price. There still is a level of risk in its business case,” Milne admits, “we’re not quite there yet.”

However, this is not the end of the story. The increasing uptake of other renewable technologies is the driving force behind what has been described as the momentum shift towards pumped storage in the UK. Estimates suggest the UK needs ten times its current energy storage capacity; required to deal with the intermittent nature of renewables such as wind power which are currently being installed across the country.

“Some people do see pumped storage as a real market opportunity to complement other renewables,” Milne remarks. “They see it as a real driver. Although pumped storage does meet a relatively small peak of demand before other generating capacity comes online and takes up the slack, this can be a profitable area to operate – albeit more speculative.”

Milne gives the example of the 1800MW Dinorwig pumped storage project in Wales. He describes this as a highly successful business. A major pumped storage scheme in the UK, it has a particular part to play in the energy industry and it does it very well.

Pumped storage has always had an operational value and can play an important part in balancing frequency and the grid. Now it seems that as the intermittent nature of other renewable technologies is becoming more of an issue, the door is being left wide open for pumped storage to enter.

“‘It’s an interesting sector,” Milne reflects. “A sector in which we’re seeing increasing opportunities.”

Blue sky thinking

Milne has been in his role as energy director at MWH for over a year now. “It’s been great,” he says. “MWH as a business is culturally very supportive and puts a lot of focus on technical competency. There are some great guys here and the market place is moving and shaping in a way that we can support. Hydro is a very interesting business and it’s great to be part of it.”

The UK energy sector may be relatively buoyant and competitive but there still is uncertainty at the present time. There are opportunities out there in the market place and everyone is jostling for position. On the heels of this MWH has ambitious plans to develop its UK business, and hydro will form a large part of this.

The hydro business may have been relatively flat in the UK over recent years. Nonetheless MWH still has a team there to support global operations. The aim now is to grow a bigger team in the UK which can also act as a platform for the Europe/Africa region.

“There are big opportunities for hydro out there,” Milne says, “and MWH is committed to taking them forward. MWH has a very strong brand in the water sector in the UK and we aim to have an equally strong brand in the hydro sector.”

Having a broad perspective across the energy sector is another goal for MWH. Milne mentions an interest in marine power. “We are looking at this as a development theme,” he explains. “As an individual I would really like to be a part of this. The UK is a good place to be within this sector. To date marine renewables have been technology-focused but the technology is beginning to prove itself. The industry now needs to start looking more at project delivery.”

Milne goes on to expand upon the fact that there is a big difference between a 1MW demonstration project and a 100MW array of marine power. And it’s here that MWH believes it has a role to play.

“We hope we can support the marine power sector in terms of project delivery and technical skills. I’d really like to see ourselves in that area, and in two to three years we’ll be able to position ourselves to offer such support,” he says.

On the back of the marine power sector comes some ‘blue sky’ thinking for the pumped storage sector. This has evolved from research into plans for tidal power projects in the UK over recent years, such as the Mersey and Severn rivers. Although these have faced difficulties in relation to environmental and commercial concerns it has prompted more discussion on the idea of seawater pumped storage.

By utilising offshore facilities the visual and environmental impact of pumped storage schemes can be reduced. In addition such tidal ranges have the potential to offer much larger storage possibilities than conventional pumped schemes. MWH has been in discussions with a Belgian company and various UK organisations about looking into this opportunity.

“It still is an idea at the moment but there is the possibility we could consider using tidal ranges,” Milne adds. He believes that tidal range power development may be a stepping stone towards seawater pumped storage, helping to move technology development forwards.

“It’s a way of scaling up pumped storage,” Milne concludes enthusiastically. “There is the possibility of hours or even days of energy storage capacity. It is very much blue sky thinking, and there are various technical and environmental challenges, but this could be an exciting future development in the UK.”