The Energy Storage Report 2024

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Battery-based energy storage in Europe as a modern alternative to pumped hydro

Recent AES BESS project in Kilroot, Northern Ireland in close-up. Image: AES.
Pumped hydroelectric storage (PHS), long a key complement to the inflexibility of nuclear generation due to its ability to provide on-demand power, has met its match – battery energy storage systems (BESS). Pumped hydro sees turbines driven by water which is dropped from one large reservoir down to another.

Throughout Europe nearly 45GW of PHS has been installed to mitigate nuclear’s inflexibility. With the EU 2030 Energy Strategy targeting 27% renewable energy consumption, this inherently intermittent resource will further increase the need for energy storage to ensure grid stability.

But with rapid advances in BESS, PHS is no longer the “go to” technology to meet Europe’s growing need for flexibility. For the following reasons, BESS provides a more attractive solution that will make it difficult for new PHS units, not already in construction, to move forward:

An innovative project on the remote Spanish island of El Hierro combines pumped hydro with renewables, but siting, planning and constructing similar projects would be out of the question in most parts of the world. Image: Gorona del Viento.
Development: Given BESS’s low visual profile and lack of direct emissions and water usage, permitting is fast and construction can be completed in less than a year. For example, project kickoff for AES Corporation’s 10MW Netherlands Advancion Energy Storage Array deployment in Vlissingen was last February and it successfully tested for grid service 10 months later. PHS, often challenged by multiple stakeholders concerned with people displacement, biodiversity, visual and other impacts, can create a lengthy process, and significant construction requirements can delay project completion by more than a decade.

Performance: It is hard to imagine response times faster than BESS – its ability to respond in milliseconds in either direction to full capacity or to zero (as both a source and a sink) is the gold standard. Recent improvements to PHS design can reportedly move response times from one or two minutes in each direction to something faster, but it is difficult to see future full capacity speeds approaching current BESS response times without adding significant project costs or incurring material efficiency losses.

Efficiency: Round trip efficiencies vary for both technologies – PHS is dependent on site location and related factors like evaporation and distance between reservoirs while BESS largely depends on inherent design. Publicly available PHS information suggests a range of 70%-85%. Our experience based on eight years of operating BESS installations is that efficiency is much better, ranging from 85%-93% depending on duty cycle.

Economics: According to reports from the National Hydropower Association, PHS capital costs for projects with capacity greater than 1000MW range from $1500/kW to $2500/kW, while smaller projects have proportionately higher costs. Alternatively, a 500MW, six-hour BESS configuration has a capital cost range of $1900/kW to $2200/kW. As battery costs continue to decline, the economic advantage of BESS will become even more apparent.

Flexibility: One of the more important considerations has to do with the superior flexibility of BESS. This superiority spans two dimensions: scaling flexibility and locational flexibility. While the size and timing of PHS is largely dependent on available and acceptable locations (with elevated topography, room for basin development, and transmission access), BESS is extraordinarily flexible.

It can be deployed and scaled as it is needed, for example 100MW per year for 10 years vs 1000MW all at once in the case of PHS, and it can be deployed in multiple locations – in a commercial area or industrial park. Given the advancing renewable energy paradigm where supply is becoming increasingly distributed and intermittent, the scaling and locational flexibility of BESS is vastly superior to a large, centralized PHS installation.

Footprint: Land required for a pumped hydro installation is significant. One existing site with over 1000MW capacity spans 106 hectares. If the same capacity and duration were to be replicated with BESS and constructed all at once and at the same location (albeit unlikely for the reasons above), the estimated equivalent building area would be less than 5 hectares or 5% of the footprint. Simply put, BESS can produce more power with less plant than PHS.

As BESS becomes more ubiquitous and its applications become more prevalent, greater recognition of BESS benefits will emerge. In addition to considering historically available technologies to meet the rapidly growing need for flexibility, utilities and grid operators will increasingly broaden their selection to more modern technologies, including BESS. As that selection is expanded, BESS will emerge as a superior alternative to PHS.

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