The solution to the green transition
Pumped hydro, not batteries, is the storage solution we need
This article is a “co-op-ed” written with Antoine Vandenborre, who helps manage renewable energy development at a company based in the United Kingdom. We focused our attention on an overlooked but important aspect of the transition away from fossil fuels: storing renewable energy.
We argue that too much of the discussion in countries like the United States focuses on battery technology, which overlooks more practical solutions. In spite of its rising emissions, countries like China have been far more effective at creating a roadmap to zero-carbon electrical grids.
Solutions to our problems already exist
Shifting a grid from primarily fossil fuels to wind and solar energy presents major challenges. For one, it calls for building transmission lines to new wind and solar farms. This has been well covered in publications like the Economist, which have detailed the United States’ struggle to renovate its aging grid network thanks to NIMBYism (“not in my backyard!”) and a torturous permitting process.
But just as important as transmission is the ability to store intermittent renewable energy until it is needed. For example, solar panels generate the most electricity when the sun is brightest at around noon, but the hottest time of day — when electricity demand for air conditioning is at its highest — is typically around 3pm, leading to a mismatch between peak supply and peak demand.
The solution to this problem is fairly straightforward: build more facilities to store energy. At utilities scale, large scale storage starts to be required as market penetration of renewables in total generation reaches 20-30%. Without adequate storage infrastructure, you get California — a state that has more than enough wind and solar generation for a 100% green grid, but continues to burn natural gas. In 2017 the Golden State even paid neighbours to take excess electricity off of its grid during times of low demand but high wind and solar generation.
At the moment, American policymakers, businesses and media are overly focused on battery technology as the solution to this challenge. Unlike nations such as China and Australia, they are ignoring an existing technology that has long been in use and can be scaled up: pumped storage hydropower (PSH).
The Limmern pumped storage power station in Switzerland:
PSH is better for grid-level storage than batteries
First built in the 1890s, PSH sites involve pumping water from a lower reservoir during times of high power generation, and releasing the water when demand rises. They can be “closed loop” systems, meaning they are not part of rivers, which reduces their environmental impact. During the 20th century PSH was often paired with nuclear power plants — which cannot shut down during times of low demand — to store excess energy until it was needed.
PSH is vital in keeping energy prices and supply stable, and is the only proven, cost efficient, and scalable form of energy storage currently available. Although it’s not widely known outside energy circles, it is already the world’s largest source of energy storage by a significant margin. In 2020, PSH accounted for 8.5TWh of global energy storage — just under 100% of total capacity.
Although the IEA projects battery storage to increase 8-fold by 2026, it will still be just 0.2TWh of global energy storage capacity. At between 70-80% efficiency, PSH doesn’t perform as well as lithium-ion batteries at absorbing and discharging electricity, but it scales significantly better, is cheaper, less environmentally-intensive, and lasts for much longer without costly maintenance.
Contrary to common belief, there are enough viable sites around the world to significantly scale up this solution. According to a study from the Australian National University, there are 616,000 potential PSH globally with storage potential of 23mn GWh — one hundred times the capacity needed for a global, 100% renewable grid. And within America, a 2022 report from the Department of Energy found 35TWh of potential energy storage across 14,846 sites, primarily in the western continental US. Estimates put a country like the United States’ storage needs for a renewable-dominant grid at around 6TWh; to fund this with Tesla batteries at their current prices would cost US$2tn — and this is assuming the US would be able to get its hands on the requisite amounts of lithium and other raw materials for such an undertaking.
It is also worth considering the feasibility challenges that over-reliance on batteries presents. They become less efficient over time and they are fiendishly difficult to recycle, making it difficult to justify their lifetime cost. Moreover, procurement must compete with supply chains of EVs. This, combined with the price volatility of raw materials and China’s commanding position in the supply chain makes using them for grids a questionable strategic choice.
Offshoring environmental problems?
If you Google pictures of Sulawesi, the salamander-shaped island of the Indonesian archipelago near Borneo and the Philippines, you would see pictures of tropical rainforests, indigenous longhouse architecture, improbable lagoons and the equally surprising Buton people, many of whom have clear blue eyes. You might miss the pictures from the interior, where some of the most productive mines in the world are making Indonesia the global leader in exporting nickel and other minerals essential to satisfy the massive increase in global battery demand.
Good luck getting this permitted near an American suburb
Of the 186 Nickel mines operating globally in 2023, 127 are in Indonesia. It is no secret that mining is environmentally destructive. The record shows that the coming years will leave many places and communities damaged by water pollution, forced labor, deforestation and poor health outcomes. Even where there are no humans to worry about, the environmental risks are controversial — as the world was recently reminded during debates over deep sea mining. The story is already forgotten, but will resurface by early 2025, when The Metals Company is expected to apply for a license to begin mining the seafloor.
Such mining activity, of course, meets strong opposition in many western societies. There has even been fierce resistance to using a former iron mine for pumped storage in California. But if more PSH is not built in the US, the result will be more mining in countries with weaker environmental standards, which will lead to a net loss for global biodiversity — not a “nice-to-have” for civilisation, but a requirement for sustaining human life. Unfortunately, many advocacy groups employ narrow definitions of the environment that fail to acknowledge the trade-offs involved with the transition to renewables.
Very broadly, mining will be necessary to avoid the worst impacts of climate change. The International Energy Association projects that, in 2023 alone, US$1.7tn will be invested in “clean” technologies. The demand for lithium could grow over 40 times by 2040, almost entirely driven by demand for EVs and battery storage. The question then becomes one of minimising the damage caused by mining for battery materials such as lithium and nickel.
It is not clear that the necessary scale of investment in battery resources for grid-level energy storage and load balancing is feasible. PSH, on the other hand, has a remarkably small resource intensity by comparison and, in closed-loop systems, does not threaten river ecosystems or natural floodplains in the way that traditional hydropower does.
Politics versus geopolitics
At the moment, the country making the most concerted effort to build storage infrastructure at the scale needed for renewable-dominant grids is China, which accounts for 80% of pumped hydro plans worldwide. In fact, although its emissions are rising, China is one of the only countries in the world that is likely to hit its climate targets significantly ahead of schedule (even though its pledges are still insufficient to align with 1.5C of warming).
Global CO2 emissions by country:
In contrast, the Biden administration’s promise to decarbonise the country’s electricity grids by 2035 is almost certain to fall short — largely due to the lack of a realistic blueprint for building the transmission and storage needed for such an energy system.
China is currently leading the world in building new green grid infrastructure because it is making the hardware needed for such systems — things like ultra high voltage direct current transmission lines and pumped storage hydropower. The country has started acting on plans to build 270GW of pumped storage capacity. This is a mammoth amount; China’s total energy capacity in 2022 was 2,564GW, meaning they are going to add over 10% to the country’s energy capacity in the form of PSH.
Global PSH sites (orange is for PSH currently under construction):
Speaking at the Southbank Centre in London this summer, Mark Carney, former governor of the Bank of England and co-chair of the Glasgow Financial Alliance for Net Zero, said that “One of the pennies that have dropped in American policy circles is that China is really competitive on climate,” which has influenced legislation like the Inflation Reduction Act (IRA). The American approach, however, is vastly different from China’s systematic nation-wide investment in infrastructure.
China’s relatively weak private property rights, government staffed with engineers, and lack of elections allows it to execute top-down plans for the green transition. In contrast, the IRA focuses on funding and tax subsidies for businesses at the expense of rolling out a coordinated national-level approach for the renewable transition. The last pumped storage site built in America was in 2012 and most of the current capacity was built in the 1970s. The new projects that have been proposed are relatively small-scale and are being planned by private companies such as Rye Development. And they have been in the pipeline for years waiting for final approvals.
At the moment, the US strategy appears to be relying on techno futurism and massive private sector subsidies to provide the solutions to the renewable transition. The real innovation may be to overhaul American governance. What the country needs are concrete plans and incentive structures to ensure a grid run primarily on wind and solar energy can happen. Without such a plan, the United States risks losing credibility in one of the key areas of governance in the 21st century.
Adapt or face irrelevance
Poorly-managed grids alienate citizens, as we have seen in Germany during the recent energy crisis, which was exacerbated by the recent decision to shut off the country’s remaining nuclear reactors. In the early 2000s rolling blackouts in California led to one of the few recalls of a state governor in American history. Without better planning and coordination, the United States risks creating inefficient energy systems that fail to provide cheap and reliable electricity to consumers. The ultimate consequences of this are likely a continued reliance on fossil fuels and/or angry citizens.
If countries like the United States don’t change their approach soon, their influence in guiding developing countries’ energy policies is likely to wane. The tools for the green transition are now readily available to developed nations; what is lacking is the political will to accept the tradeoffs of such policies. While there are alternatives such as nuclear power plants and more hydropower, these face even higher hurdles than PSH when it comes to NIMBYism and permitting.
Resistance to transmission lines and pumped storage sites on environmental grounds frequently miss the forest for the trees — without this infrastructure, the green transition simply cannot happen. Until representative governments roll up their sleeves and focus on tackling the issue of energy storage, a democratic industrial society powered by clean energy will remain an impossibility.
I love the concept, but would it work for the United States?
You might notice that Switzerland has plenty of mountains and valleys but the great expense between the Rockies and the Appalachians lack those amenities.