The World’s Largest Battery Isn’t What You Think

Because of the intermittency of renewable energy sources like wind and solar, storing large amounts of power is a necessity for the decarbonization of our energy system. However, we still don’t have enough batteries to compensate for renewable energy slumps across the planet. When thinking about the biggest utility-scale energy storage installations, a huge cylindrical lithium-ion battery-powered light bulb may go off in your head. But what if I told you the world’s largest battery taps into water rather than lithium? Can an old technology, even one still learning new tricks, be the answer? Let’s see if we can come to a decision on this.

Not too long ago, one of my Patrons asked me about the current progress here in the US towards building out enough large-scale lithium ion battery systems to cover our energy storage needs. I knew that Tesla has been ramping up Megapack installations, but their efforts alone are far from meeting American storage demand … let alone the global one. Another thing to consider is that most lithium ion facilities are for real-time peak saving rather than for long-term storage. Many of the longer-term storage technologies I’ve covered on this channel are still in the pilot phase. When I started to dive into the largest battery systems on the planet, I was surprised by what I found. I was aware that pumped hydro storage made up the largest energy storage facilities today, but what I didn’t know was by how much and they’re still developing. This old technology is still making advances and maintaining its worldwide lead for energy storage. They’re even building them out in the desert, which really surprised me. I know you’re feeling pumped up, so let’s dip our toes into the water-to-energy storage pool.

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The Earth’s biggest energy pool

According to the International Hydropower Association (IHA), pumped hydro or pumped storage hydropower (PSH) accounts for 94% of the world’s energy storage capacity.¹ In comparison, lithium-ion and other technologies are just a few drops. So, how does PSH work?² Basically, you need two interconnected reservoirs with a big gap in elevation between them. You can use existing lakes or even decommissioned mines. However, PSH’s energy density is over 400x lower than lithium-ion batteries.^{3 4} To compensate for that, you need a high head, or a large elevation change, which is the distance traveled by water from the upper pool to the turbine. Generally, the higher the head, the more energy you can store per volumetric unit of water.⁵ One problem is that you can’t have high heads everywhere, which is one of PSH limitations.⁶ However, RheEnergise is trying to water down this issue head on. The UK-based startup is using R-19, a fluid 2.5x denser than water.⁷ By doing so, they reduce the required vertical elevation by a factor of 2.5. Other than a sufficiently high head, a PHS plant will need reversible pump-turbines. During daytime, when electricity demand and price are high, you let water stored in the upper reservoir fall down by gravity. While flowing down along a pipe, water will pass through the turbine generating electricity, which is how you produce power in a conventional hydroelectric plant. During the nighttime, when demand is lower, the PSH turbine can turn from a generator into a pump, moving water from the lower basin to the upper one, recharging the supply for the next big demand. Power is stored as water’s gravitational potential energy and is ready to be used when you need to shave off the peaks of the demand curve. You can have two types of PSH design.⁸ In an open-loop configuration, the upper basin is continuously connected to a river downstream, so you’ll need to build a dam to create the lower pool. Alternatively, in a closed-loop scheme the 2-reservoir system is isolated from the hydrological network. As you can imagine, closed-loop PSH poses a lower environmental risk for the surrounding ecosystem.⁹

So who’s wearing the largest battery crown in operation on the planet? With a power output of around 3GW, Bath County facility currently holds that record.¹⁰ The Virginia-based plant has been running for nearly 30 years and it’s also the 10th largest power plant in the U.S., producing more energy than Hoover Dam.¹¹ Defying gravity across a 1,200-feet (ca. 366-meter) head, its six reversible turbines can move 13 million gallons (ca. 59 million liters) of water from the lower to the upper reservoir in around 11 hours. What’s even cooler is that it can be up and running in just 15 minutes, which is much quicker than what fossil-fuelled plants take to ramp up. However, it won’t be long before Bath County loses its crown. After 7 years of work and a nearly $2 billion investment¹², last December China switched on the Fengning Pumped Storage Power Plant for the Beijing Winter Olympics.¹³ Once all of its 12 300-MW turbines are operational, the Fengning facility will reach a 3.6GW power output¹⁴, hitting two records with one pump. Surpassing Bath County by installed power output and being the PSH station with the highest number of turbines in the world. This will give the plant more flexibility in the level of energy they can handle. For the time being, only 2 generators are online.¹⁴ China is planning to make another splash in the near future.¹⁵ The State Grid Corporation of China (SGCC) just leaked a plan to increase its total pumped storage power output from the current 26.3GW to 100GW by 2030. While pumped hydro is the largest and most common type of energy storage, it isn’t the only game in town.

Some dry facts on waterless storage tech

You can’t store energy out of thin air, right? Yet, you could press your luck with thicker air. Besides pumped hydro, China is also revamping a 30-year-old storage concept: Compressed air energy storage (CAES).¹⁶ In fact, the world’s first CAES plant was installed in Germany in 1978.¹⁷ The way you generate electricity is roughly the same as PSH except that you use compressed air instead of water to drive a turbine. As for storage, the system uses the extra energy from the grid to power a compressor and then bank the pressurized air in an underground chamber. After years of design optimization, in 2016 Chinese researchers released a 10MW advanced CAES (A-CAES) pilot plant. Their technological advancements made the system 60% efficient. In comparison, conventional CAES’s efficiency can be as low as 40%.¹⁸ To achieve this result, scientists introduced a thermal unit that captures and recirculates the heat generated during air compression. Heat recovery is a technique I’ve touched on in quite a few videos recently. Also, they devised more efficient compression and heat management systems.¹⁹ Since then, researchers upscaled their design to a 100MW prototype which was connected to the grid last October²⁰. Providing the daily electricity consumption of 3,000 Chinese homes, this system is supposed to reach a 70% efficiency. While they keep pressing forward, their A-CAES efficiency is still lower than competing technologies like PSH and lithium-ion batteries, which are between 80%²⁰ and 90%¹⁸ respectively. On the other hand, it may be a safer option. According to scientists, their A-CAES works at medium pressures so there’s only a limited risk of explosion.²¹ This is reassuring news compared to the world’s largest lithium-ion battery melting twice over the last five months.²²

The Chinese aren’t the only ones storing energy out of thick air. Hydrostor has already piloted two A-CAES plants in Ontario.²³ And last November the Canadian company requested the California regulators to build two larger facilities, with a power output of up to 500 MW and an initial investment of up to nearly $1bn. Having said that, large-scale A-CAES may be a more worthy deal compared to lithium-ion batteries in the short term. In fact, doubling the plant power output from 250 to 500 MW halves its per kWh cost. To be more specific, when considering the 500 MW facility we’re looking at $100 per kWh (for the build), which is 50% cheaper than a lithium-ion battery of similar capability.¹⁸ Also, when considering the improvement of the transmission system as a use case, compressed air has a much lower levelized cost of storage (LCOS) than both lithium-ion and pumped hydro technologies.²⁴ If their application is accepted, Hydrostor touts these plants could be ready by 2026 and last for 50 years.²⁵ While PSH plants have a similar or even longer lifespan²⁶, lithium-ion battery installations would require proper maintenance or even unit replacement to turn 40.²⁷

So, how does the Hydrostor solution work? During the storage step, they use off-peak or excess renewable power to run a compressor and inject pressurized air into a newly-dug water-filled cavern as deep as 1,000 feet (ca. 300 meters). The compressed air displaces water, pushing it towards a surface-level closed-loop reservoir. The latter maintains the system at a constant pressure during operation, which makes the process more efficient. Also, like the Chinese plant, there’s a thermal management unit that recovers the waste heat generated by the compression step and stores it in a tank. When it’s time to deliver energy, they send water back to the underground chamber to release the air, which is mixed with the stored heat. The hot air then drives a turbine, which generates electricity. The discharge step can last for up to 12 hours, which is much longer compared to lithium-ion batteries, typically running for up to 4 hours. However, although reusing waste heat, the Hydrostor round-trip efficiency is still capped at 60%. In terms of logistics, A-CAES systems like Hydrostor are more flexible than PSH because they’re not limited to a sloped landscape. While it’s true Hydrostor will need to store compressed air in an underground cavern, the company CEO says their plant is versatile enough that it can be built on 70% of the planet.¹⁸

Water and air are two classical elements for energy storage, but what about the other element we all know? Lithium-ion batteries are so ubiquitous that we would have expected it to be the guest star. However, despite the hype, it’s just an extra for the time being.. Backing up Moss Landing natural gas power plant from December 2020, the largest lithium-ion battery energy storage system (BESS) can only dispatch 300MW²⁸. This is 12x less than what Fengning PSH will deliver at full scale. On the other hand, Vistra Energy, the facility developer, is looking to expand the storage power output to up to 1.5GW. As it stands, the plant features 4,500 stacked battery racks, including 22 modules each.²⁹ While PSH still covers most of our storage capability, lithium-ion batteries are catching up. As of 2017, lithium-ion accounted for around 90% of new large-scale chemical battery storage additions.³⁰ In fact, the electrochemical battery is expected to supercharge its potential up to 28 GW per year by 2028.³¹

Why’s that? When comparing the levelized cost of energy (LCOE) of the two technologies, lithium-ion batteries are more cost-effective only for storage durations shorter than 4 hours.²⁹ That’s why they’re the optimal solution for fast-response grid stability. Lithium-ion batteries are the newer technology versus PSH systems, which means they’ll likely experience a much greater LCOE reduction thanks to technological innovation and economies of scale.³² Bottom line: PSH has mostly matured and has less room for improvements, giving lithium ion batteries a chance to catch up. Just think that the price of battery packs decreased by 89% over the last 10 years.³³ Also, a recent study forecasted their LCOS to be lower than PSH and CAES for most of the stationary applications from 2030.³⁴ So, it’s fair to assume that they will be pivotal in balancing our energy grids.

Water batteries are spilling over everywhere

This is where PSH shows that it still has some cards up its sleeve. New pumped hydro installations are flooding unexpected areas of the Earth, like deserts. This past February, rPlus Hydro submitted an application to build Nevada’s first pumped hydro storage facility.³⁵ Apparently, White Pine County ticks all the boxes for hosting pumped storage hydropower. Like a 2,000-feet (ca. 610 meters) vertical drop over a short distance, plenty of space to create two new large reservoirs and a nearby source of water to fill them up. After completing a feasibility study, the company could start building their 1GW closed-loop PSH plant in 2025.³⁶ Just to give you a sense of scale, the White Pine storage capacity would cover about 1/8th of Nevada’s peak power demand on a hot summer day. One eighth of the demand includes all of the air conditioners in Las Vegas when temperatures soar over 100 F (~38 C), so there is a substantial amount of power released by this project. Once up and running, this water-based battery will supply electricity to the local community for up to 8 hours. White Pine is not the only project of this kind in the US. To water down California blackouts, Eagle Crest Energy is developing a more sustainable 1.3GW plant in Eagle Mountain.³⁷ In this case, instead of digging two new pools, the project developer will fill up two abandoned iron open pits placed at different elevations in the Mojave Desert.³⁸ On top of that, the plant will also use surplus renewables from a nearby 2GW solar farm to pump water from the lower mine to the upper one.³⁸ After being fully charged, this storage oasis will flush green energy for up to 18 hours. However, this won’t happen until 2027. Beyond the arid Southwestern US, PSH plants are popping up in the Arabic desert as well. As of last December, The Dubai Electricity and Water Authority (DEWA) had completed 35% of their 250MW pumped hydro plant.³⁹ With an investment of around $400 million, this will be the first facility built in the Gulf region and may go into service in 2024.⁴⁰ While not being in the desert, mega-scale pumped hydro facilities are progressing in Asia⁴¹, Europe⁴², and the UK⁴³ as well.

What’s in store for the future of energy storage?

If we want to decarbonize our grids, we need a huge energy storage capability for managing the variability of renewables like solar and wind. While lithium ion batteries have dominated the conversation, the old kid on the block is still showing that it can help us hit our needs today at a price we can afford. PSH is still wearing the largest battery crown and it makes up most of our energy storage portfolio. It’s not a knock against lithium ion or tech like A-CAES, which have a bright future, but let’s not get caught up on the newest, latest, best. Sometimes it’s the older ideas that can help pave the way for a brighter future.

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