March 15, 2017

In Virginia Push for Pumped Storage Hydro, Questions Arise About Viability

In a bid to boost the economy in Virginia’s coalfield region, legislation to be signed by Gov. Terry McAuliffe seeks to spur the development of pumped storage hydro electric power plants using water from abandoned coal mines.

While the companion bills in both the Senate and House of Delegates drew virtually unanimous support from both chambers, researchers, coal reclamation experts and even some renewable energy advocates say the idea is still unproven. While pumped storage facilities exist in Virginia and elsewhere, no plant drawing water from abandoned coal mines has been built anywhere in the world.

The effort led by Sen. Ben Chafin, Del. Terry Kilgore and Del. Todd Pillion focused on seven counties in the western end of the state. Like much of Appalachia, this region has seen dozens of coal mines close over the past decade, draining local governments of tax revenues to fund schools and other government services.

Pumped storage plants work by using cheap, excess electricity at night to pump water uphill into a higher elevation lake or reservoir. Energy can be recaptured during times of higher demand by reversing the flow and sending the water through turbines to a lower reservoir.

Pumped storage plants are operating throughout the world and have been assessed for abandoned iron pits in Minnesota, where the presence of iron and the threat of rust when water oxidizes threatens operations. In addition to the amount and the quality of the water needed, the coalfield region needs to be geologically stable, said Don Fosnacht, an associate professor at the University of Minnesota’s Natural Resources Institute.

Hayes Framme, Gov. McAuliffe’s point person on many energy issues as the state’s Deputy Secretary of the Department of Commerce and Trade, said engineers from the state’s Division of Mines, Minerals and Energy (DMME) have been kicking around the idea for several years. While pumped storage has never been tried with water trapped in abandoned coal mines, Tarah Kesterson, a spokeswoman for DMME, said her colleagues believe the iron levels to be below any harmful threshold.

Linda Church Ciocci, executive director of the National Hydropower Association, said a recently-licensed pumped storage project in Southern California by Eagle Crest Energy intends to draw on water from an abandoned mine east of Palm Springs and may bode well for similar approaches in Virginia.

An ‘Intriguing’ Concept

Because pumped-storage can serve as a type of “battery,” it can sometimes be paired with wind systems which often operate best at night when wind speeds in suitable locations are highest. With the strong appetite for renewable sources throughout the PJM power grid that includes Virginia, the low-cost, daytime, electricity could find willing buyers there to offset peak prices, especially on summer days when demand for electricity drives wholesale prices skyward.

The largest such pumped-storage plant in the world happens to be in Virginia in Bath County. There, Dominion Virginia Power has been operating a 3,000 megawatt-capacity plant since the mid-1980s. It has drawn rave reviews as the “world’s biggest battery” and visits by curious engineers and government officials from around the world.

Sen. Chafin and Delegates Kilgore and Pillion visited the Bath County plant in December. They drew up Senate Bill 1418 and paired it with House Bill 1760. The bills, now combined, await McAuliffe’s signature.  Hamme signaled McAuliffe will sign it this spring.

“We think the concept is an intriguing one … enough (not) to stop initial development in its tracks,” Framme said.

Framme and Matt Ogburn, Sen. Chafin’s legislative aide, said most of the attention thus far is on several 50–400 MW facilities which could amount to more than 2,000 MW. There are pairs of reservoirs in Wise and Dickenson counties that appear, at least initially, to be suitable, Ogburn said.

Questions About Who Pays

Unlike any other type of power plant, existing language in both bills declares “construction of these generation and storage facilities … to be in the public interest” and free of many permitting and other rules that utilities and other new plant applicants must submit to.

But therein exists a potential hurdle: how much such a facility will cost ratepayers and the company’s shareholders? While Dominion Virginia Power and Appalachian Power (APCo), as investor-owned utilities, would effectively be offered this streamlined path to approval and full recovery from ratepayers, neither would commit to pursuing such a facility without extensive study.

Fosnacht estimated from two studies he has led that a 100-MW pumped storage facility would likely cost about $120 million.

John Shepelwich, a spokesman for APCo, said, “We’re talking about two possible scenarios here in a combined (APCo–Dominion) study. One is the traditional approach to pumped storage, the other will focus on water trapped in abandoned coal mines.”

As the utility that serves the coalfield region, APCo already has a large, traditional, pumped storage facility to the east of the coalfield region near Roanoke, Virginia at Smith Mountain Lake.

Shepelwich said tapping water from coal mines “might be more of a stretch. We have a bit of a learning curve. That said, there are other parties who may look at that option in the future.”

“Since the Bath County and Smith Mountain Lake facilities were constructed, there have been new applications of pumped storage developed world wide,” said David Botkins, a spokesman for Dominion. “This legislation allows use of these new approaches.”

Beyond such projects’ technical feasibility, among the utilities’ other considerations are the additional transmission lines that would be required to connect the power to their respective networks and to the PJM grid.

Botkins projected: “If constructed, (each) pumped storage facility would create hundreds of construction jobs and 10-15 high-paying, permanent, jobs.”

Ogburn also notes the counties would benefit from additional tax revenue.

Adam Wells, who works on economic diversification initiatives for the Appalachian Voices advocacy group and lives in Norton in the heart of the coalfield region, signaled what’s contemplated would garner significant support if such a facility could be paired with a large wind or solar energy system.

“There’s growing favorable sentiment among elected leaders and county developers for solar. We can remain as an energy-producing region. It’s just that the medium is going to change,” Wells said.

“We’re trying to tackle a whole lot of things all at once,” Ogburn said. “How are we going to diversify the economy; how are we going to create jobs; how are we going to create tax revenue?”

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