South Australia leads again as saltwater pumped hydro storage takes shape

South Australia leads again as saltwater pumped hydro storage takes shape

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South Australia is ready to lead again, this time with saltwater pumped hydro storage. Here’s an inside look at what is planned.

View to the east from the proposed pumphouse location, with the now-shuttered Northern Power Station (left) and Sundrop Farms (right).
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William Gibson, founder of the ‘cyberpunk’ genre, famously noted that “the future is already here — it’s just not very evenly distributed.” He could easily have been referring to South Australia.

While the confected debate in the political and media sphere rages on — shall we follow Western Australia and blow $310m of taxpayers’ funds to extend the life of a coal power station for just two years extra generation? — the often derided state of South Australia is just getting on with it.

If you haven’t noticed that South Australia is a global leader in the energy transition, consider this:

The misinformed and the ideologues will continue to make snide comments about blackouts and high prices — for sport, ask them how many blackouts SA has experienced, why they occurred and why SA’s wholesale prices are higher than elsewhere — but those with eyes wide open can see the state’s clear leadership.

Only last week we heard that British billionaire Sanjay Gupta has bought a majority stake in Adelaide-based Zen Energy and will harness the local expertise for his ambitious plan to use renewable energy for a significant portion of the energy required to run his Whyalla steelworks.

This week EnergyAustralia published the first-stage feasibility report for yet another world leading project — the Cultana Pumped Hydro Energy Storage Project.

The proposed 225 MW seawater pumped hydro energy storage (PHES) project would be sited on the Spencer Gulf, not far from former coal town Port Augusta, and will have a capacity of 1770 MWh, holding almost 14 times more than Elon Musk’s ‘megabattery’.

Selected historical, new and proposed energy developments in the Spencer Gulf.
Selected historical, new and proposed energy developments in the Spencer Gulf.

Look across the bay and you can just make out the former Northern Power Station — a reminder of days gone by.

Look to your right and you’ll see the glow of Sundrop Farms, the innovative solar thermal ‘farm of the future’ where 23,000 mirrors and a 115m-tall tower desalinate seawater and power a farm that hydroponically grows 100 million truss tomatoes annually for Coles supermarkets.

View to the east from the proposed pumphouse location, with the now-shuttered Northern Power Station (left) and Sundrop Farms (right).
View to the east from the proposed pumphouse location, with the now-shuttered Northern Power Station (left) and Sundrop Farms (right).

The feasibility study, partly funded through a $453,000 grant from the Australian Renewable Energy Agency (ARENA), was undertaken by a team from Energy Australia, University of Melbourne and Arup.

The initial concept for the project was put forward by Professor Peter Seligman — incidentally the leader electronic engineer for the bionic ear — in a 2010 Melbourne Energy Institute treatise on Australia’s renewable energy potential.

Professor Seligman was aware of (and later visited) the Yanbaru sea-water pumped hydro system in Okinawa, Japan and of the existence similar conditions and power system challenges along the southern coast of Australia.

Yanbaru SPHES power plant, Okinawa, Japan
Yanbaru SPHES power plant, Okinawa, Japan

Pumped Hydro Energy Storage (PHES) is not new — many such projects were built worldwide in the nuclear power boom of the 1970s to balance inflexible nuclear generation.

Water is pumped uphill at times of excess supply, with the energy recaptured through conventional hydroelectric technology later on when demand exceeds supply.

Australia has extensive experience in freshwater PHES, with three plants in operation: Tumut 3 (1500 MW), Shoalhaven (two schemes totalling 240 MW) and the under-utilised Wivenhoe (2 x 250 MW).

While we haven’t built any pumped hydro projects in Australia for 40 years, we are witnessing a renaissance of interest, such as the NAIF-shortlisted 250 MW Genex Kidston project, an investigation into utilising the disused mine system underlying Bendigo
, Snowy2.0, Tassie2.0 and the 22,000 potential PHES sites identified by Andrew Blakers team at ANU.

Cultana Pumped Hydro Electric Storage schematic profile

Unlike freshwater systems, seawater PHES systems don’t need a bottom reservoir, instead making use of the ocean.

While there are some potential challenges — such as marine biofouling, corrosion and environmental, tidal and storm protection measures — these have proven to be straightforward to solve though appropriate materials selection and the significant marine engineering experience gained through the construction of Australia’s desalination plants.

Added complexity and cost related to seawater are offset by reduced civil works (only one reservoir) and the abundant access of water, a significant issue for power projects in arid regions.

Cultana site showing key infrastructure locations
Cultana site showing key infrastructure locations

The Cultana project site is well situated on non-arable land near ElectraNet’s 275kV Davenport substation, has excellent local geological conditions and presents no significant environmental or social impacts. (Incidentally, Indian giant Adani received the green light for its nearby 140 MW Whyalla Solar Farm earlier this week.)

A 37 hectare ‘turkey nest’ reservoir holding 3.2 GL is proposed to be constructed near the edge of a 260m plateau on Department of Defence land. Three 3.5m (outside diameter) lined steel pipes would descend down the face of a hill to the flat where they will be buried underground.

The pipework, totalling 3.1 km, will feed up to 110m3 of water per second into a powerhouse descending six stories underground and two above on Crown land.

The bunker-style powerhouse will contain three reversible Francis pump-turbines, each weighing 140 tonnes and capable of generating 75 MW or consuming 83 MW when pumping. Synchronous, fixed speed generators have been chosen for their ability to provide actual, rather than synthetic inertia.

Modelling indicates that the plant will be 72% efficient, a little lower than the rule-of-thumb of 80% attributed to PHES due to the relatively long penstock pipes. Any analysis of energy efficiency needs to consider that Cultana will reduce the wasteful curtailment of wind energy elsewhere in the state.

Like the Tesla megabattery, the plant is not intended to ‘power the state’ — cue asinine comment from Chris Kenny and Alan Jones about the system providing only three minutes ‘backup’ for Eastern Australia — but instead would play a very important role in shifting supply from periods of the day when energy is cheap to the times of day when prices can spike to double, five times and even 200 times the overnight average.

Energy market arbitrage is not the only source of income. As well as providing much needed inertia (680MWs) to the SA grid — helping to maintain system frequency — the entire station will be able to transition from a standstill to full load in 150 seconds, allowing it provide market ‘caps’ and firming services which help to control risk for retailers.

The project will be well placed to participate in the various ancillary services markets, bringing in revenue for helping to shore up the grid’s reliability and security.

The system will be able to provide voltage control as it can run as a synchronous condenser, or in more basic terms, it will be one of the largest power factor correction devices in the state.

The Cultana PHES project is well placed to help South Australia more easily integrate even more variable renewable energy and reduce the state’s reliance on expensive gas generation.

All arbitrage eats its own lunch. That is, the entry of significant new arbitrage capability will tend to reduce price the very price spread and volatility that drove the original business case.

Selecting the right size for the project is a tricky optimisation challenge and deserves an article of its own. Suffice to say that the project has been sized so that it can make a significant difference in the market and recover its own costs, but not so big as to erase the financial opportunity.

Relationship between size of PHES system and modelled market revenue (Reference Case, 2020/21)
Relationship between size of PHES system and modelled market revenue (Reference Case, 2020/21)

The other optimisation challenge is determining the volume of storage. Modelling by Dylan McConnell of the Energy Transition Hub at Melbourne University has shown that the marginal value of storage decreases significantly beyond about eight hours.

Preliminary capital cost estimates
Preliminary capital cost estimates

After optimising capital cost and predicted revenues, a design was selected and estimated at a total construction cost of $477 million, or about $2.1 million per megawatt installed capacity.

Based on the identified revenue streams and the capital and operating cost assumptions, the feasibility study expects the project will be economically viable with a post-
tax nominal rate of return of 8–12%.

According to EnergyAustralia, the return “is broadly comparable to a benchmark project hurdle rate commensurate with technology and market risks of a private sector investment in a project of this nature.”

Naturally, those paying attention are keen to understand how this project stacks up against batteries.

Cost comparison of PHES with utility scale lithium ion battery storage systems
Cost comparison of PHES with utility scale lithium ion battery storage systems

The charts above show that this PHES project compares favourably with lithium ion batteries on a capital cost basis when built at this scale and as storage capacity increases.

The comparison is not like-for-like, however, as the PHES system will incur greater operational costs (estimated at $11.9m per annum for Cultana) but enjoy much lower degradation over its 30 year design life.

Batteries have other capabilities (such as Fast Frequency Response) while PHES can provide system restart and inertia. As such it is fair to say that both batteries and PHES can play complementary roles in Australia’s energy transition.

As a next step the project must secure land access agreements and the necessary approvals, engage with the community and complete Front End Engineering Design. On an aggressive schedule the project could be ready for Final Investment Decision by the end of 2018. Once approved, the plant could be operational by 2023.

The feasibility project is great example of collaboration between academia (Melbourne Energy Institute) and industy (Energy Australia and Arup) and a shining example of the role of ARENA to significantly de-risk a feasibility study for a technology that otherwise would likely have been passed over.

In keeping with ARENA’s charter, the project has shared a detailed summary in the form of a Knowledge Sharing Report which includes a detailed discussion of the project’s revenue model.

Cultana by the numbers
Cultana by the numbers

At the launch of the feasibility study’s report on Wednesday evening, EnergyAustralia’s Managing Director Catherine Tanna commented that Prime Minister Malcolm Turnbull showed palpable excitement when briefed on the project earlier this year.

The Cultana project is certainly much more in line with Turnbull’s 2015 Innovation Agenda (remember that?) than slapping Band-Aids on the decrepit Liddell coal power station.

Simon Holmes à Court is senior advisor to the Energy Transition Hub at Melbourne University and can be found on twitter @simonahac

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  1. Joe 3 years ago

    Just love reading every new development that is happening in SA. Premier Jay is leading the nation and showing what can be done when there is a future vision and a current will to do what is right for the generations that follow. All that Two Tongues Turnbull & co can offer is….coal and how to prolong its use.

    • Mike Westerman 3 years ago

      Yep – gutsy and visionary leadership…highlights the juvenile carrying on of the LNP

      • Andrew Scott 3 years ago

        Mike ,
        see my reply above to Joe, re pumped hydro in SA.

        On the broader topic of visionary energy leadership in SA, remember this:

        Premier Weatherill and Minister Koutsantonis, are true gas believers. They have directed many tens of millions of dollars of grant funding to the gas corporates for exploration and drilling.

        As part of their energy plan they have hundreds of millions of $’s notionally earmarked for establishment of future gas generators in SA.

        Wind farming in SA was championed by Mike Wran.
        His successor has been happy to have it continue where Grid infrastructure exists. but has not provided strong advocacy for Grid upgrade to the Eyre Peninsula to tap its enormous wind resource.

        Weatheril and Koutsantonis seem to have quietly accommodated the energy management directives from the eastern seaboard regulatory system that curtail SA wind-farming so that gas generation is lifted.

        With PHSR in place, such directives could be negated and phaseout of the gas generators could be more quickly advanced.
        I should not have to explain why the latter is essential, but SA Labor leaders just do not get it.

        • Mike Westerman 3 years ago

          Andrew I think we all have very good reason to be cynical towards our pollies, so I am no blind eyed Weatherill enthusiast, BUT, it is crucial that he succeed in current endeavours. Turnbull came to office with enormous support, not least because of his previous stand on RE. When he had a choice of whether to be a leader or a politician, he chose politics: he could have stepped in after the SA blackout, recognised the market failures that had led to a system not responding adequately to extreme natural events, and led. Instead he revived a discredited scheme (I worked on an FS for Tantagarra to Talbingo in 1981 from memory) that doesn’t do what we need PHES to do in Australia. The pollies have supported gas because if you read just 2-3y ago, gas was feted as the “bridging fuel” from coal to renewables, and SA was earning considerable revenues from it. Now the wheels have predictably fallen off that wagon, they are looking for the next likely candidate to save the state. SA will need to fast starting reliable backup for extreme days as long as it is one line trip away from disaster – OCGT, particularly aero-derivative is good at that as long as it is maintained.

    • Andrew Scott 3 years ago

      In your enthusiasm you are forgetting several important facts relevant to this story about Pumped Hydro Storage and Recovery in SA:

      Whether you like him or not,
      It is PM Malcolm Turnbull who has worked out that Pumped Hydro Storage and Recovery is the key engineered element needed to make the Grid fit for purpose.
      he is the most senior Parliamentarian to have reached that conclusion to date.
      he is the parliamentarian who has endorsed provision of funds from the commonwealth arena for this study in SA to proceed.

      In stark contrast, all SA parliamentarians, (Labor, Liberal and Green) who have had the potential for PHSR in this region of SA drawn to their attention during the past 5 years, have done absolutely nothing about it. They have all run dead on it.

      • Simon Holmes A Court 3 years ago

        yeah, but nah. while he’s a supporter, you can’t give malcolm any credit for PHES in australia.

      • David K Clarke 3 years ago

        Liberal SA Premier John Olsen sold the SA electrical supply system into private hands a couple of decades ago (after promising not to before the election). The state government has little control over exactly what infrastructure is built, but unlike eastern state governments at least they have been consistently supportive of renewables.

        In contrast, PM Turnbull has repeadedly lied about the causes of SA’s power failures, blaming them on renewables. The intermittent nature of SA’s renewable energy had nothing to do with our power failures.

      • Mike Shackleton 3 years ago

        Oh please, politicians don’t “work out” anything. What we have in SA is the end result of the cartel-like market conditions, combined with new technology and favourable economics for that technology. Jay Weatherill is just being open/welcoming to new players (who have done all the working out) within the market who have assessed that they can be profitable, which is what competition is all about. Will some of the projects fail financially? It is probable. Someone will probably pick them up for a song and then be able to make them profitable. The lessons and IP will carry on to further projects.

  2. Leslie Nicholson 3 years ago

    also the bungala solar power plant is in the same area along with the lincoln gap wind farm. Northern has all but been replaced, but the need for storage on SA’s network will only grow. once that is figured out the gas generators are going to be in a bit of a pickle

  3. Peter G 3 years ago

    Thanks Simon for another thoughtful and informative article.
    Your observation with respect to the sizing of the facility is particularly interesting in respect to a consideration to any dis-juncture between what is economically efficient in terms of our current market rules and structure and what would be technically efficient to support the development of SA’s abundant renewable resources at the lowest overall cost.

    The intertia contribution is also interesting “As well as providing much needed inertia (680MWs) to the SA grid…” does this figure represent 3 x the (225MW) capacity that would appear to span by the generation and recharge cycles or is there another calculation?

    • Simon Holmes A Court 3 years ago

      sorry, i don’t yet have enough knowledge about inertia — but no, it is unlikely to be simply 3x225MW.

      sizing is interesting — would be great for consumers if it was much bigger, but would kill the fincial viability for the assett owner.

      • Malcolm M 3 years ago

        Inertia is required at the same time as the best pumping opportunities, and the pumped storage can’t do both at the same time. According to AEMO rules the inertia in SA at present, a pumped storage hydro could be used for inertia only in generation mode. It would probably require all 3 units to count as equivalent to one unit of Torrens Island B, for example. AEMO are continuing to undertake further modelling of inertia in SA, and we can expect the rules to keep changing as their understanding grows and further synthetic inertia comes online. Their most recent modelling was based on there being sufficient real inertia to accommodate the trip of the largest gas generator operating at any one time. It was only based on “real” inertia, and did not allow for synthetic inertia nor fast-response load shedding. As their understanding grows I expect these other forms of grid stabilisation would also count. For example, the big battery should provide synthetic inertia equivalent to at least 100 MW of gas. The pumped storage in pump mode would be able to shed 225 MW of load if there is a frequency abberation caused by the trip of a gas generator or the inter-connector.

        • Mike Westerman 3 years ago

          If pumping is occurring during peak solar ie power is being exported to Vic and that line trips, the issue is overfrequency due to excess generation cf load. In this case the pumps would try to ride thru, and overvoltage would quickly trip solar off to rebalance ie the pump inertia is effective. If the pumps are running on excess wind, and a wind turbine trips, the pumps will trip on either UF or OV, and the system having much less load and generation should be able to recover. This is quite different to the blackout when there wasn’t enough load shedding nor enough local generation to restore balance. I would think modelling would show pumps contribute to inertia in scenarios when they need to.

        • Simon Holmes A Court 3 years ago

          my understanding from speaking to arup is that the system will provide real inertial when it is pumping.

        • Peter G 3 years ago

          I wonder if a direct comparison with an older gas turbine can be made – I understood (from see Tom Butler Re article) that although response from open cycle gas is fast there are issues with durability.
          If it fits, the below graph compares technologies.

      • Peter G 3 years ago

        Thanks for the reply Simon. You your article did prompt a bit of a google search on my part to reveal a wealth of recent papers around the subject. Interestingly and one 2017 paper advocates variable speed hydro as superior frequency response in pump operation mode.

        • Malcolm M 3 years ago

          AEMO are no doubt thinly stretched, with insufficient staff who have developed an expertise in this issue, yet having to produce policy on the run to support operational requirements in SA. The Cultana report indicates a preference for variable speed technology, but concludes that because AEMO currently only acknowledge real synchronous inertia, it would need to be the preference. This is a pity, because international experience clearly indicates that synthetic inertia is more robust. In a few years time, the AEMO operational rules will no doubt be updated to reflect this reality, but this doesn’t help investors.

          • Mike Westerman 3 years ago

            I don’t think the inertia will be significantly impacted by going to variable speed. For this size plant variable speed would mean the limited speed reduction possible with DFIG so the inertia is only reduced in proportion to speed – it is still “real” inertia ie rotational inertia, not synthetic.

    • Mike Westerman 3 years ago

      Hydro generators have “natural” inertia constant of around 3.6 MWs/MVA, that is, the economic inertia for an optimal machine results in about that value. Higher speed machines may have a lower constant. It is possible to push it up to 4 but adding significant peripheral mass leads to bigger bearings and greater stress on the rotor spider so quickly becomes uneconomical. With small horizontal machines, it may be feasible to use a flywheel.

      • Peter G 3 years ago

        Thanks Mike.

  4. David K Clarke 3 years ago

    In the first graph, where is says “potential net revinue ($000/MW)” does that mean $000/installed MW/year?

    • Mike Westerman 3 years ago

      It looks about right for that to be so

  5. David K Clarke 3 years ago

    Very good article. It’s a great pity that so many other articles we see are designed to mislead rather than to inform, like this one!

    • Simon Holmes A Court 3 years ago

      thanks david — i enjoyed writing it.

      • Chris Corr 3 years ago

        Yes thanks Simon.

  6. Mike Westerman 3 years ago

    Great article. Unfortunately as I found when I looked at saltwater sites in SA, it is hard to break the $2M/M for 6h storage, and that makes the project subjects to significant risk! 220MW of PHES would have earned $70-80M this year, and more last year, due to high priced events but of course the presence of 220MW of fast response may well obviate these. Arbitrage in SA more typically is more like $80, which makes a $2M/MW/6h plant borderline. The key to getting these essential items built will be for security payments to become a reality, to compensate for “leakage” of the added value elsewhere, and reduce the incentive for gaming the market.

  7. Alen T 3 years ago

    Good article and great / fun read, thank you.

  8. Kevfromspace 3 years ago

    Great article, but I take issue with this paragraph:

    “Batteries have other capabilities (such as Fast Frequency Response) while PHES can provide system restart and inertia. As such it is fair to say that both batteries and PHES can play complementary roles in Australia’s energy transition.”

    Tesla’s Powerpack can provide the same system restart services that this PHES project can, so that’s not a differentiating factor.

    • Simon Holmes A Court 3 years ago

      thanks — i’d love confirmation of that. happy to correct.

      • Simon Holmes A Court 3 years ago

        (the claim came from the report — i’ll follow it up.)

  9. Kevfromspace 3 years ago

    Another thought: will the Aurora plant coming online in 2020 and bidding at $0/MWh during peak events hurt the business case for this project?

    • Simon Holmes A Court 3 years ago

      aurora is unlikely to bid at $0 — unlike wind and solar PV they don’t need to be price takers.

      • Kevfromspace 3 years ago

        Fair enough. Will the Aurora project affect the economics of this PHES project regardless?

        • Simon Holmes A Court 3 years ago

          all new generation has some effect on the market, but i suppose hat while there’s a symbiotic relationship between PHES and wind/PV, aurora and cultana will, to some degree, compete.
          good for south australians.

    • Simon Holmes A Court 3 years ago

      as i think i said elsewhere, i don’t see aurora bidding in at $0. as a dispatchable source, they can afford to wait to time their output for maximum value.

  10. nakedChimp 3 years ago

    Here we go again, only designed and built if the ROI is positive.. yay.

    • juxx0r 3 years ago

      it’s like they haven’t heard of kickstarter

  11. Malcolm M 3 years ago

    It is a great pity that the Department of Defense is limiting the project to a BAD site that requires a 3 km long penstock. The long penstock reduces the round trip efficiency to 72%, increases project costs, and increases the arbitrage required to make a profit. About 10 km to the south is a similar site only 2 km from the coast. If a cut from the sea were allowed 300 m into Defense land, the penstock could be only 1.5 km long, with the power station west of Shack Road. Furthermore, Defense would only allow them land for the power station to the east of Shack Road (off Defense land), leading to lower efficiencies.

    They have had a raw deal from Defense. If it had been a mining project they would have been allowed the best part of the “deposit”. For example, the Prominent Hill mine is located on Defense land and haven’t had the same compromises. Perhaps some enquiries need to be made with the Minister, because as it stands this project has marginal economics.

    • Simon Holmes A Court 3 years ago

      do you know if DoD constrained them to this site, or is this speculation?

      • Malcolm M 3 years ago

        In the report it says that DoD preferred the power station be located east of Shack Road, which according to Google Earth places it at a ground level of about 10 m and about 250 m from the shore.

        Google Earth also shows an area of the escarpment that is 10 km to the south of the proposed site, which is the same height but only 2 km from the shore (32°37’38.14″S 137°45’33.72″E). It would require a 10 km longer transmission line but a penstock that is 1 km shorter. This site would be even more feasible if DoD allowed the power station to be built on DoD land to the west of Shack Road rather than to the east. This would allow a longer cut bringing the sea closer to the escarpment, and shortening the penstocks further. At the Murray 2 power station, for example there is a cut 1.4 km long and 60 m deep, which shortens the penstocks and would lead to increased efficiency (36°14’34.02″S 148° 8’6.49″E). There would be an optimum combination between cut length vs penstock length, and there doesn’t seem to have been any attempt to define this optimum because DoD have specified where it should be.

    • Mike Westerman 3 years ago

      I don’t that’s fair or accurate: none of the escarpments to the west of Pt Augusta are really close to the sea, so it’s either a long penstock or long tailrace tunnel. The land to the south has quite a slope to the south and west, so a turkey’s nest would be expensive. I suspect Arup did a fair bit of examination of the topos to find the ideal site. The best seawater sites in SA are probably those on the Fleurieu Peninsula but the electrical infrastructure down there is poor apart from the NIMBY effect).

  12. james seycheles 3 years ago

    Great Article. Now you need to find somebody who sales you the power to pump water up to the fill in and refill the water storage, and the tariff shall be 7 to 10 times less than the tariff you expect to sales with.
    knowing that any potential power supplier whether its a Solar or wind farm are build to make money, mean tariff based.
    I personally doubt that you can find anyone to sacrifice his investment.

    • Mike Westerman 3 years ago

      James – already there is a large price differential between peak prices (evening from about 5pm to 9pm and other than summer, 6am-8am or there abouts). Because of the amount of rooftop solar during the day, there is a very low priced period emerging from 10am-4pm. This is being installed by people who see a 4-5y payback on their investment, so they already are and will continue to be incentivised to install more. Further, because of the amount of wind installed that often generates when the only other generation on line is gas, that is sufficient to incentivise their ongoing installation. However when the wind is blowing during off peak periods, wind may be curtailed. Put all this together, and pumped hydro obviously needs to be flexible in the market, but can readily find enough power at <$40 (subsidised by LGCs, so potentially $0) to sell at $100-250. Note that because of the long economic life of PHES, the levelised cost is $40-90. Even so, the challenge is to convince financiers!

    • Simon Holmes A Court 3 years ago

      no, you don’t need to find someone to sell you the power — the national electricity market will sell you the energy anytime of the day or night. it’s a simple, time-honoured strategy: buy low, sell high.

      • 5NRG 3 years ago

        Simon: Good you find one, now the question is what will be the tariff?

        I think the needed power to pump up (quantity of water) is in the rate of 7-10 time the power out /Down

        • Simon Holmes A Court 3 years ago

          nope, the ration of power out (generating) to power in (pumping) is 72:100.

          for a discussion about the economics, read the linked report.

          • 5NRG 3 years ago

            Thanks Simon

        • Mike Westerman 3 years ago

          No, depending on pump design and operating (guide vane) setting, the power may be the same both ways. The pump time would then be about 25% longer than generating. If the levelised cost is $40, and buying cost of surplus RE is $40, then you need a selling price $80 to get your return.

          • 5NRG 3 years ago

            thank you very much Mike

  13. 5NRG 3 years ago

    Thanks Mike. It all about synchronisation, there will be no guarantee that the peak power will be needed only when your storage is full, also no guarantee that the wind will be blowing only when your storage is empty, I’m in opinion (I also may be wrong) that unless you divide your storage to at least 3 part this will be a challenge, or build a second storage next to the one already planned.

    • Mike Westerman 3 years ago

      No guarantees, which is the financing challenge, especially for a FF dominated power industry. But statistically in the longer term, the weather is relatively predictable, and the sun very much so. In SA, when it is windy it tends to be frontal, so overcast and often cold. This used to really flatten price curves but now that AEMO has introduced inertia requirements that at present are met by gas, the price in SA will be the gas price during peak periods and wind will be curtailed off during off peak periods since the SA price will be well above Victoria if gas is running. PHES will displace gas under these circumstances, providing inertia and spinning reserve in synch con mode. This will enable generation periods to be managed quite well. During hot periods, solar will depress prices during the day fairly predictably, with PHES generation in the evening.

  14. Alan S 3 years ago

    Refreshing to read a sensible and respectful technical discussion about this topic – in contrast to the speculative nonsense on many other news sites. Also a good news story about SA makes the Crows’ loss to Richmond slightly easier to handle.

  15. Andreas Bimba 3 years ago

    I’m also impressed with this article.

    The time for renewables has definitely arrived and all the needed technologies are now falling into place. We should all be uncorking some Australian sparkling wine over this turning point and we must all thank those thousands that have toiled and donated their time, some for decades to bring this about. The opposition by our fossil fuel industry driven Conservative federal government is looking ridiculous to any reasonable observer and will soon wither away like the value of the fossil fuel industry’s toxic investments. The much denigrated environment activists saved the industry from digging an even deeper hole for themselves and also for their reckless and incompetent financial backers – mostly our big four banks.

    The best funding source for the huge number of renewable energy projects now required, for energy efficiency improvements and all the other parts needed to transition to environmental sustainability nationally is however not the private sector capital markets but the federal government through direct grants to the states and for its own projects or for low interest loans to the private sector. Modern Monetary Theory (MMT) macroeconomics tells us that for monetary sovereigns like our federal government and the RBA, that federal government spending creates money and federal government taxation extinguishes money and so net spending (we know it as the deficit) is met from created money that is not borrowed nor does it attract any interest. Current convention is to issue government bonds on a one to one ratio with net spending but this is more of a subsidy for the world’s financial services sector and the reality is that government bonds and similar securities do not fund federal government net spending. Such net spending is not inflationary to any significant degree as the economy grows by a commensurate amount up until the point when real resources such as labour or needed materials start to become short in supply.

    The main proponents of MMT macroeconomics such as Professor Bill Mitchell of Newcastle University propose that federal government net spending be adjusted so as to eventually produce full employment with a job guarantee program being the employer of last resort. Most new employment however arises from fiscal stimulus which generates jobs in both the government and private sectors.

    Do you have a spare one and half hours to learn about macroeconomics, how to fund major national infrastructure projects and ensure adequate government services and full employment?

  16. michael nolan 3 years ago

    Very informative article Simon.
    Economics for PHES is very compelling on the duration side as a reserve energy. The more reserve required the cheaper PHES gets per MWh. There is room for diversity of strategic reserves, as other technologies are re-deployable and quicker to market.
    Some other pro’s of PHES are:
    Long-life (30-50 years) versus batteries (7 to 15 years)
    Relatively benign and ‘mature technology’
    Unlike Gas and diesel, fuel costs will not go up

    Any idea on the cost per MWH for saltwater versus cost per MWh for freshwater ?

  17. MrMauricio 3 years ago

    Turnbull often show “palpable excitement” at the sites of renewable energy technology innovation but behaves as a COAL ASS in the political arena

  18. HarryDutch 3 years ago

    Here we go again lets be the first. A seawater pumped hydro plant was first built in Japan in 1999. Aggressive corrosion caused by salt water was a matter of great attention in the pilot project of Okinawa Yanbaru in Japan. The cost for this 30MW pilot project was some AUS$620 Million. Over its more than 14 years of operation, this facility has faced many challenges, in particular, corrosion, due to the system’s reliance on salt water and its unique interaction with the ocean, which resulted in increased operation and maintenance costs. In the meantime, today there is not much wind blowing in South Australia, generating 90MW (5%) from its 1560MW installed capacity.

    • Simon Holmes A Court 3 years ago

      the EA report claimed that corrosion was _not_ an issue at the japanese SPHES plant. do you have a source?

      • HarryDutch 3 years ago

        Looks like that my earlier reply disappeared.

        • Mike Westerman 3 years ago

          Harry this pre-construction paper seems to indicate they did a fairly thorough job on corrosion prevention and the plant won an engineering award. The plant seems to have run until the Yoshinoura gas power station was commissioned by the local electricity supply company (OPEC), made operation of the EPDC owned salt water PHES uneconomical.

          • HarryDutch 3 years ago

            Mike, the Japanese pilot project of Okinawa was so successful that no commercial plants were ever built in Japan. For Energy Australia to find vendors experienced in with “Seawater Reversible, Fixed Speed Francis Pump-Turbines” is not going to be easy. ANDRITZ HYDRO Gmbh, a German based global supplier of electro-mechanical systems for hydropower plants, consider the economic benefit of seawater pumped storage power questionable.

          • Mike Westerman 3 years ago

            Don’t get me wrong, I have long expressed my doubts on the economics of saltwater schemes especially when viable freshwater sites are readily available. In SA particularly IMO we should be looking for schemes that also increase water storage.

  19. Gary Rowbottom 3 years ago

    A great article, thanks Simon. I am delighted my home region is host to so many renewable energy developments, like the Aurora Solar Thermal project, that address storage, in a significant way. The Cultana PHES also sounds great. Energy Australia are hosting another public update on the Cultana Project, in Port Augusta, on 4th October.
    DP Energy Port Augusta Renewable Energy Park, Stage 1, is also expected to commence construction before the end of the year.
    Bring it on.

  20. Andy Saunders 3 years ago

    “All arbitrage eats its own lunch”

    Too true. Which is why there will likely be a race to be the first (or perhaps the second or third, especially if the design can be modified to cater for any problems experienced by the first!). The early birds get the good sites (and the best price arbitrage).

    Simon, well done, especially for not forgetting poor old Sundrop Farms, which has been there a couple of years now with little fanfare just doing it’s renewable thing quietly…

  21. RobertO 3 years ago

    Hi Simon, very good article, however I wonder if in the study of PHES were they also looking for any triple or more linked storages (top flows into middle storage say 50 MW which can then flow if need in to next storage say another 50 MW and then on to another storage say another 50 MW, Francis Turbines come in almost any size wanted so it sized (designed) to the system requirments.

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