Navigant Research Blog

Renewed Interest in Older Forms of Energy Storage

Alex Eller — November 17, 2015

After recently receiving support from Governor Steve Bullock, a planned pumped hydro storage (PHS) project in Montana has moved one step closer to reality. While the Gordon Butte project still faces many hurdles on the road to development, it is being embraced by many in Montana as a way to help take advantage of the state’s abundant renewable energy resources. Located in remote Meagher County, the facility would add a 400 MW resource capable of storing excess wind energy to be released at times of high demand. Montana-based Absaroka Energy is developing the project, working to secure financing and permits, as well as an interconnection and partnership agreement with a regional utility.

This project is part of a trend of renewed interest in PHS and other forms of electro-mechanical energy storage. According to Navigant Research’s Energy Storage Tracker 1Q15 report, there are 42 PHS projects in various stages of development around the world, including 13 located in the United States. As the penetration of renewable energy increases globally, energy storage solutions of all types are emerging as efficient ways to manage fluctuating supply and demand. While advanced batteries are an ideal choice for managing the grid’s stability over short time periods, the economics of very long duration (6+ hour) energy storage often do not line up given the high upfront cost and limited lifetime of battery technologies. Thus, many grid operators are looking at alternative storage technologies to help align the output of renewable energy with times of peak demand.

Generation and Demand

A common issue with renewable energy is the mismatch between when energy is generated and when demand is highest; this is a particularly acute problem in remote areas or physical islands that are unable to import or export energy whenever it is needed. In Montana and other areas, wind power is generally most productive at night (when there is minimal demand for energy) and is generally unavailable during peak demand hours when energy is needed most. The aim of Gordon Butte and other planned PHS projects is to allow this abundant wind energy to be shifted from when it is produced to times of peak demand, often in the evening, helping to ease utility concerns around balancing wind’s variable output. An economical means of storing large amounts of wind energy could allow Montana to fully capitalize on its immense natural resources, potentially allowing the state to export power to surrounding areas and greatly reducing the amount it spends on importing fossil fuels.

Despite the attractive economics and potential positive impacts PHS facilities can have, development of such large and complex infrastructure projects can be challenging, costly, and time-consuming. In addition to concerns regarding impacts on water resources and local wildlife, issues surround land-use and permitting have derailed past projects. These projects will face increasing competition from rapidly advancing battery technologies that are improving the economics of long-duration storage with more flexibility and less complex development processes.

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