Tag: Cruachan Power Station

Drax’s plans can help the next Government deliver UK energy security

Will Gardiner, Chief Executive Officer, Drax Group

7 June 2024

Opinion

The UK has decarbonised its energy system at a quicker rate than any other country, but having done ‘the easy bit’ and with demand for electricity forecast to increase by 50% by 2035, we are now at an inflection point.

Additionally, leading thinktank Public First’s research shows that in 2028 the UK is on course to hit an energy security “crunch point” – with peak demand predicted to exceed secure dispatchable and baseload capacity by 7.5GW.

This is due to delays in bringing new generation on to the system, anticipated increased demand for power, and aging assets, including coal, nuclear and gas, coming off the electricity grid.

That means to deliver energy security, meet rising demand for power and to reach binding net zero targets, including the 5th and 6th carbon budgets, the next government needs to go further and faster.

This year marks half a century that Drax has been powering the UK and contributing to security of supply. Today, the flexible, dispatchable power that our assets in North Yorkshire and Scotland produce keep the lights on when the wind doesn’t blow and the sun doesn’t shine.

Drax Power Station, the UK’s largest single-source of renewable electricity, powers 4 million homes. In Scotland, Cruachan Power Station and our other hydro power sites provide the grid flexibility, reduce the need for curtailment payments to wind farms and help meet the demand for energy.

In total our business delivers about 4% of the UK’s electricity and 8% of its renewable power.

Subject to getting the right policy support, we stand ready to invest billions to deliver carbon removals and renewable power using bioenergy with carbon capture and storage (BECCS) at Drax and more than double the pumped hydro storage capacity at Cruachan.

Completing these projects will mean we can play a vital long-term role in providing secure power to the country and supporting the next government in meeting the goal of a decarbonised grid by 2030 or 2035. Without Drax’s assets delivering these targets will be extremely challenging.

Our plans for BECCS and the expansion at Cruachan will also reduce the country’s exposure to commercially volatile and imported fossil fuels, enhance our national security and create and support thousands of jobs during construction.

But to realise this potential, the next government must prioritise and speed up implementing the support required to unlock the investment for these major infrastructure projects.

To deliver the first pumped storage hydro power stations in the UK for decades, including the Cruachan expansion, we need to see a cap and floor mechanism implemented. This would provide an investment framework to reduce risks for investors while at the same time encouraging operators of the new storage facilities to respond to system needs.

And all large-scale biomass generators planning to transition to BECCS need the certainty of a bridging mechanism to maintain their flexible, dispatchable renewable power between the end of the current renewable support and BECCS operations starting.

The carbon removals BECCS can deliver are recognised by the world’s leading climate scientists, including the UN’s IPCC and the UK’s CCC, as crucial to almost all pathways to reach net zero and fighting climate change. The carbon credits produced through BECCS can be purchased by companies with emissions that are hard or impossible to abate providing a pathway for them to permanently remove carbon from the atmosphere.

Energy security, jobs and skills and net zero should go hand in hand and we want to work with the next Government to swiftly implement these policies. Doing so will give new ministers the best chance possible to maintain progress on decarbonising the UK’s energy system while ensuring there is sufficient, secure capacity to meet the country’s energy needs without relying on foreign fossil fuels.

Learn more about how Drax supports the UK energy system here.

Expanding pumped storage hydro to support the UK’s transition to Net Zero

9 April 2024

Opinion

By Steve Marshall, Drax’s Development Manager 

In July 2023, Drax received development consent from the Scottish Government to build a new 600MW underground pumped storage hydro plant at its existing Cruachan facility in Argyll, which will more than double its electricity generating capacity.

Whilst a major milestone for the Cruachan expansion project, the right support is still needed from the UK Government to facilitate its development and we’re pleased to see some positive progress has recently been made.

During a visit to Cruachan Power Station following last year’s announcement of development consent, Scotland’s First Minister, Humza Yousaf, called on the UK Government to “provide an appropriate market mechanism” for projects including Cruachan’s expansion. Mr Yousaf also wrote to the Prime Minister urging him to take action so developers can have the certainty required to build a new generation of pumped storage hydro plants.

In order to incentivise investment for new-build pumped storage hydro plants, new financial mechanisms are needed to enable investors to back capital-intensive, long-length construction projects that will save consumers and the grid millions. The current lack of these frameworks is a key reason why no new pumped storage hydro plants have been built in the UK since 1984.

Growing the UK’s pumped storage hydro capacity is crucial to integrating more wind and solar power onto the energy grid, enhancing the nation’s energy security while tackling climate change. Pumped storage plants act like giant water batteries by using reversible turbines to pump water from a lower reservoir to an upper reservoir which stores excess power from sources such as wind farms when supply outstrips demand. These same turbines are then reversed to bring the stored water back through the plant to generate power when the country needs it.

At the start of this year, the UK Government announced that it has selected a cap and floor regime as its preferred investment framework for new large-scale, long-duration electricity storage projects, which is a huge step towards making a new generation of pumped storage hydro plants a reality.

What is a ‘cap and floor’ mechanism?

A cap and floor mechanism works by setting an upper and lower revenue limit an operator participating in the mechanism can earn from a particular asset. The lower revenue limit, or ‘floor’, is the guaranteed minimum amount of revenue that a generation asset can earn. If a generation asset does not generate enough revenue from its operations, this gets topped up to reach that floor level from the system operator using an allocated budget. At the other end of the limit, the ‘cap’ is the maximum amount of revenue the operator can earn from the asset. In cases where an asset’s revenue exceeds the cap, a proportion of the funds earned above the cap threshold are paid back to the system operator and used to reduce the cost of using the system for customers.

The cap and floor mechanism enables private investors in long-duration electricity storage projects, such as Drax’s planned expansion of Cruachan, to have a better degree of confidence by alleviating a significant amount of risk and uncertainty around whether they can recover their costs. Having a predictable revenue stream makes it more likely investors and lenders will support projects with high upfront capital costs. As well as de-risking investment and providing better value for money to customers, a cap and floor mechanism also rewards availability and efficiency, as operators are still exposed to opportunities between the cap and the floor. This includes participating in a number of different markets like the ancillary services markets, where Cruachan is able to earn revenue by providing critical inertia and stability to the grid, ensuring the safe and stable operation of the electricity system. Similarly, wholesale market arbitrage allows Cruachan to respond to price signals both in times of low/high generation and peak demand. These market opportunities incentivise operators to optimise their operations to generate revenue towards the highest end of the cap thresholds, driving innovation and efficiency in the sector. This efficiency is not only beneficial for the operators but also for the overall National Grid, bolstering the stability and reliability of the UK’s electricity supply. This enables projects to benefit from competitive market opportunities and provide services in response to price changes and benefit the consumer by providing critical services that the system needs at a competitive price.

What does this mean for Drax’s Cruachan expansion project and what are the next steps?

The UK Government’s consultation on designing a policy framework to enable investment in long-duration electricity storage ran from 9 January to 5 March 2024, and is now closed.

The consultation proposal of a cap and floor is very positive news for Drax’s planned Cruachan expansion, as it will provide the project with a route to market once the mechanism is in place. Without it, the significant upfront capital expenditure and revenue uncertainty would remain a barrier to investing in the project.

One of the most immediate benefits of pumped storage hydro is that it provides extremely quick back-up during periods of peak demand. For example, when deployed alongside intermittent renewables like wind or solar power, Cruachan can step in to store excess energy and provide it back to the grid when the wind doesn’t blow and the sun doesn’t shine. This reduces the waste and cost to customers associated with renewable curtailment.

With the Government’s ambition to deliver 50GW of offshore wind by 2030 as part of its Net Zero targets, it is in the interest of both Government and the grid to ensure enough storage is available by this point to manage the inherent intermittency of this technology. Pumped storage hydro projects have long construction times, over 5 years in the case of the planned Cruachan expansion. This means that delivery of the mechanism in the near-term is critical to ensuring that it’s available to support the electricity system in the early 2030s and beyond.

What are the benefits of pumped storage hydro for the UK?

A report by Scottish Renewables and BiGGAR Economics recently found that six projects currently under development in Scotland, including the Cruachan expansion project, will:

  • More than double the UK’s pumped storage hydro capacity to 7.7GW.
  • Create almost 15,000 jobs.
  • Generate up to £5.8 billion for the UK economy by 2035.

During its construction phase, the Cruachan expansion is projected to provide up to £73m GVA and over 150 jobs in Argyll and Bute. Across Scotland this increases up to £260m GVA and over 500 jobs, which is a total possible UK benefit of over £470m GVA added to the economy and over 1,100 jobs supported amongst the wider supply chain and indirect local area support.

Pumped storage hydro can also provide a number of extra balancing and ancillary services outside of energy storage and generation, across multiple different markets. These markets play a critical role in ensuring the safe and stable operation of the electricity system by providing grid inertia, voltage control frequency response and restoration services, alongside quick flexible response to price signals both in times of low and peak demand. Being able to support wider services in this manner means pumped storage hydro offers better value for money to both investors and consumers, with an Imperial College study finding that it could help to reduce total system costs like these by between £44m and £316m per annum by 2050.

We look forward to working constructively with the UK Government and other stakeholders to help deliver a policy environment which secures investment, strengthens our energy security, and delivers for consumers. We’re ready to move mountains to tackle climate change.

Find out more about Cruachan’s plans for expansion here: drax.com/cruachan2

Getting Britain ready for the next generation of energy projects

15 July 2022

Power generation

Key takeaways:

  • As the UK continues to expand its renewable capacity the cost of curtailing wind generation at times of low demand is increasing, adding £806 million to bills over the last two years.
  • Curtailment costs arise from the grid paying to turn down generation due to energy balancing or system balancing issues.
  • Long-duration storage, such as pumped storage hydro, offers a way to absorb excess wind power, reducing the cost of keeping the system balanced.
  • Drax’s plans to expand Cruachan Power Station would increase the amount of excess power it can absorb from 400 MW to over one gigawatt, and rapidly deliver the same amount back to the grid when needed.
  • New financial mechanisms, such as a cap and floor regime, are needed to enable investors to back capital-intensive, long-term projects that will save consumers and the grid millions.

Meeting big ambitions takes big actions. And there’re few ambitions as big, or as urgent, as achieving a net zero power sector by 2035.

This energy transition must mean more low carbon power sources and fewer fossil fuels. But delivering that future requires new ways of managing power, balancing the grid and a new generation of technologies, innovation, and thinking to make big projects a reality.

As the system evolves and more renewables, particularly wind, come online, the UK is forecast to need 10 times more energy storage to deliver power when wind-levels drop, as well as absorb excess electricity when supply outstrips demand, and to maintain grid stability. Pumped hydro storage offers a tried and tested solution, but with no new long-duration storage projects built for almost 40 years in the UK, the challenges of bringing long-term projects to fruition are less engineering than they are financial.

Drax’s plan to expand Cruachan Power Station to add as much as 600 megawatts (MW) of additional capacity will help support a renewable, more affordable, net zero electricity system. But government action is needed to unlock a new generation of projects that deliver electricity storage at scale.

Reigning in excess wind power

Wind is the keystone power source in the UK’s renewable ambitions. Wind capacity increased from 5.4 GW in 2010 to 25.7 GW in 2021 – enough to provide renewable power for almost 20 million homes – and the government aims to increase this to 50 GW by 2030.

However, wind comes with challenges: the volume of electricity being generated must always match the level of demand. If there is a spike in electricity demand when there are low wind-levels, other technologies, such as electricity storage or carbon-emitting gas power, are required to make up the shortfall.

Conversely, if there is too much wind power being generated and not enough demand for electricity the grid often has to pay windfarms to stop generating. This is known as wind curtailment and it’s becoming more expensive, growing from £300 million during 2020 to more than £500 million in 2021.

An independent report by Lane Clark & Peacock (LCP), by Drax, found that over the last two years curtailing wind power added £806 million to energy bills in Britain.

There can also be a carbon cost to curtailing wind power. As more intermittent renewables come onto the system the grid can become more unstable and difficult to balance. In such an event the National Grid is required to turn to fossil fuel plants, like gas generation, that can deliver balancing and ancillary services like inertia, voltage control and reserve power that wind and solar can’t provide.

“It’s lose-lose for everyone,” says Richard Gow, Senior Government Policy Manager at Drax. “Consumers are paying money to turn off wind and to turn up gas generation because there’re not enough sources of ancillary services on the system or renewable power can’t be delivered to where it’s needed.”

“Curtailment costs have spiked this year because of gas prices, and while they might dip in the next two or three years, curtailment costs are only ever going to increase. If there’s wind power on the system without an increase in storage, the cost of managing the system is only going to go up and up.”

Source: the LCP’s ‘Renewable curtailment and the role of long duration storage’ report, click to view/download here.

The proposed Cruachan 2 expansion would help the grid avoid paying to turn off wind farms by increasing the amount it would be able to absorb from 400 MW to over 1,000 MW, and rapidly deliver the same amount of zero carbon power back to the grid should wind levels suddenly drop or the grid need urgent balancing.

Adding this kind of capability is a huge engineering project, involving huge new underground caverns, tunnels and waterways carved out of the rock below Ben Cruachan. However, the challenge in such a project lies less with the scale of the engineering than with its financeability.

From blueprints to real change

The original Cruachan Power Station’s six-year construction period began in 1959. The work of digging into the mountainside was carried out by a team of 1,300 men, known affectionately as the Tunnel Tigers, armed with hand drills and gelignite explosives in an era before modern health and safety practices.

Engineer working at Cruachan Power Station

Expanding Cruachan in the 21st century will be quite a different, and safer process, and one that’s practically, straightforward.

“There is no reason why we physically couldn’t build Cruachan 2,” says Gow. “Detailed engineering work has indicated that this is a very feasible project. There’s no technological reason or physical constraint that would prevent us. It has a large upfront cost, and requires drilling into a mountain, but the challenge is much more on the financial, particularly securing the investment, side of the project.”

Pumped storage hydro facilities today generate their revenues from three different markets: the capacity market, where they receive a flat rate per kilowatt they deliver to the grid; the wholesale and balancing market, where they buy power to store when it’s abundant and cheap and sell it back to the grid when it’s needed, more valuable and used to support the Electricity System Operator in matching supply and demand on a second-by-second basis; and through ancillary services contracts, dedicated to specific stability services.

These available markets present challenges for ambitious, capital-intensive projects designed to operate at scale. With the exception of the capacity market, revenues from these markets are often volatile and difficult to forecast, with no long-term contracts available.

Sourcing the investment needed to build projects on the scale of Cruachan 2 requires mechanisms to attract investors comfortable with long project development lead times that offer stable, low risk, rates of return in the long-term.

Cap and floor

An approach that can provide sufficient certainty to investors that income will cover the cost of debt and unlock finance for new projects is known as a ‘cap and floor’ regime.

With cap and floor, a facility’s revenues are subject to minimum and maximum levels. If revenues are below the ‘floor’ consumers would top-up revenues, while earnings above the ‘cap’ would be returned to consumers. This means investors can secure upfront funding safe in the knowledge of revenue certainty in the long term, whilst also offering protection to consumers.

Such an approach won’t attract investors looking to make a fast buck, but the vital role that it could play in the ongoing future of the UK energy system offers a long-term, stable return. At the same time, the system would save both the grid and energy consumers hundreds of millions of pounds.

The cap and floor system is also not unique, with a similar approach currently used for interconnectors, the sub-marine cables that physically connect the UK’s energy system to nearby countries allowing the UK to trade electricity with them. This means investors are already familiar with cap and floor structures, how they operate and what kind of returns they can expect.

“It’s not just pumped storage hydro that this could apply to,” explains Gow. “There are other, different large-scale, long-duration storage technologies that this could also apply to.”

“It would give us revenue certainty so that we can invest to support the system and reduce the cost of curtailment while ensuring consumers get value for their money.”

The Turbine Hall inside Cruachan Power Station

Cruachan was originally only made possible through the advocacy and actions of MP and wartime Secretary of State for Scotland Tom Johnston. Then it was needed to help absorb excess generation from the country’s new fleet of nuclear power stations and release this to meet short term spikes in demand. Today it’s renewable wind the system must adapt to.

For the UK to continue to meet an ever-changing energy system the government must be prepared to act and enable projects at scale, that bring long-term transformation for a net zero future.

Cruachan Power Station: Protecting biodiversity while generating power

1 April 2022

Sustainable business

Key points:

  • The Scottish Highlands are home to a wide variety of landscapes, with a wealth of biodiversity that must be preserved.
  • Cruachan pumped storage hydro station sits within Ben Cruachan and has operated for nearly 60-years without damaging wildlife.
  • Regular surveys and reporting allow Drax to understand the health of different fauna and species over time.
  • It’s promising that even species of bird and insects that are declining in other parts of the UK are regularly spotted around Cruachan.
  • The expansion of the power station has required and will continue to need careful assessment of the area’s biodiversity to minimise any impact the project could cause.

The Scottish Highlands are home to some of the UK’s most stunning natural wonders. From dramatic plunging lochs to the craggy, ice capped Munros, the varied landscape holds some of the most biodiverse areas in the UK. The region’s fauna ranges from red deer to golden eagles, while its flora includes the ancient oak and moss-covered forests that make up the ‘temperate rainforest’ of the Atlantic coast.

Preserving these landscapes and the life that thrives in them is crucial to both the environment and economy of the region. It’s the job of Roddy Davies, Health, Safety, and Environmental Advisor at Drax’s Cruachan Power Station to ensure operations at the site do not damage the natural environment.

“This is a very biodiverse, rich environment. There are a lot of different species, a large variety of natural habitats and plant life,” says Davies. “It’s good that we can say we’ve operated here for nearly 60 years, and all of that is still there. It’s testament that we don’t have a demonstrable negative effect on the wildlife that lives around us.”

Source: Blue Leaf Nature

Energy storage inside a mountain

The pumped storage hydro station sits a kilometre inside Ben Cruachan, a Munro peak in the Western Highland region of Argyll and Bute. It’s not an area you would normally associate with power generation, but it’s perfect for pumped storage hydro. The site has two bodies of water at differing elevations, Loch Awe at the bottom and a reservoir at the top allowing Cruachan to generate power when it’s needed, as well as absorb electricity when there is an excess on the grid by pumping water back up the mountain. Storing it until power is needed and helping to keep the grid balanced.

The subterranean nature of the power station means the massive machinery, including the four reversible turbines, and the heat and noise they generate, is hidden underground.

Features on the surface are limited to a few buildings by the entrance tunnel at the banks of Loch Awe, and the dam which contains the upper reservoir on the slopes of Ben Cruachan, as well as several pylons and cables transporting electricity. Even the 316-metre buttress dam takes the landscape into account.

“When Cruachan was built in the ’50s and ’60s, the visual impact of it was very much in the minds of the people who built it and the authorities who approved it. The dam is almost impossible to see from a public place,” explains Davies. “Our presence on the surface is very limited. All the busy goings-on are underground. There’s lots of noise underground, but it doesn’t travel outside.”

Ensuring that the area surrounding Drax’s operation continues to function without damaging the surrounding environment is an ongoing process. Davies deploys annual biodiversity surveys and reporting that gives Drax over a decade of information and analysis to help identify trends.

The wildlife of Ben Cruachan

The Cruachan Power Station Biodiversity Survey for 2021 is the 11th completed by Blue Leaf Nature, a biodiversity service provider. The comprehensive report highlights the incredible diversity of fauna surrounding Cruachan, some of which are declining in other parts of the country.

While the majestic red stags found in other parts of the Highlands are extremely uncommon around Cruachan, 2021 was a particularly exciting year for other types of large mammals. Pine martens – a cat-sized relative of the weasel – are relatively common, appearing alongside red squirrels, red foxes, and otters. Badgers were also added to the site’s list of species for the first time.

Source: Blue Leaf Nature

Mammals, however, are exceeded by the range of birds found around Cruachan, with 53 different species spotted in 2021. Of these, 17 species appear on the Birds of Conservation Concern Five’s red list, the highest threat status to the UK’s bird population, including the Ring Ouzel, Yellowhammer and Tree Pipet. A further 27 appear on the Regional International Union for the Conservation of Nature (IUCN) Red List of Threatened Species. Additionally, six of the spotted species are considered endangered (including Herring Gull and Northern Wheatear) and 11 vulnerable by the IUCN.

Sightings of these threatened species around Cruachan come despite particularly unfavourable weather in 2021. One of the driest Aprils on record followed by an exceptionally wet May disrupted the bird breeding season. This in turn resulted in a difficult nesting season, exacerbated by food shortages due to the weather’s effect on insect life.

In the report’s survey of invertebrates, 150 different species were recorded in 2021, down from 170 in 2018. However, it’s promising that among Cruachan’s creepy-crawlies are many that are in decline elsewhere in the UK, with the numbers of some important insect types are increasing. Dragonfly and damselfly species, for example, increased from five in the previous survey to nine in 2021.

Moths and butterflies are particularly important to monitor, as Davies explains: “they’re a very strong indicator species for the health and quality of an ecosystem. They’re also very sensitive to climatic changes and  react quickly to temperature change.”

Source: Blue Leaf Nature

In 2021, 78 moth species were recorded around Cruachan, including one of Butterfly Conservation’s noted priority species (Yellow-ringed carpet), as well as six species that feature on IUCN’s red or amber lists. There were 11 butterfly species recorded in 2021, including four priority species, as well as two newly spotted species: the Small Copper and the Chequered Skipper.

That species in decline around the country are increasingly thriving at Cruachan is further testament to the power station’s lack of disruption to the environment. And as the UK’s electricity system continues to evolve, and Cruachan power station with it, closely observing the surrounding environment and its inhabitants will become even more important.

Expanding Cruachan while preserving nature

While Cruachan first started generating and storing power in the 1960s, its capabilities are becoming ever more critical as the national grid decarbonises and power generation becomes increasingly decentralised. This is why Drax is undertaking an ambitious project to expand Cruachan.

Cruachan 2 would add a further 600 MW of generation capacity to the plant for a total of 1.04 GW of power. By providing stability services to the grid, the expansion could enable an additional 300-gigawatt hours of renewable power to come online.

Source: Blue Leaf Nature

The project is epic in scale. New underground tunnels and subterranean caverns will house the reversible pump-turbines and will be carved out of the mountain, vastly increasing the size of the power station. But as with any activity in such a landscape, careful planning is essential. Detailed surveys and assessments of the area are a key requirement for planning approval.

“We need to acknowledge what’s here and show that we understand what surveys have found,” says Davies. “Then we have to present our proposals for how we will protect them and mitigate any potential disturbance.”

An advantage of pumped storage hydro is that much of the intensive excavating and construction work will take place underground, with little disturbance on the surface. Cruachan 2 has the added benefit of utilising Cruachan’s existing infrastructure. For example, it would not require flooding a valley to create a new upper reservoir.

Ultimately, Cruachan’s half century-plus of operation has not damaged or degraded the biodiversity of the Western Highlands landscape. And Davies is keen to ensure that legacy is preserved: “As a company, it’s not just something we have to do; we have a moral responsibility to be a responsible operator and look after what’s around us.”

View the Cruachan Power Station Biodiversity Survey 2022 here and find out more about Green Tourism at Cruachan here. 

Storage solutions: 3 ways energy storage can get the grid to net zero

28 February 2022

Electrification

Key points:

  • Energy storage plays a crucial role in the UK electricity system by not only providing reserve power for when demand is high but also absorbing excess power when demand is low.
  • The UK’s electricity system’s growing dependency on intermittent renewables means the amount of energy storage needed will increase to as much as 30 GW by 2050.
  • There are three different durations of energy storage needed to help balance the grid: short-term, day-to-day and long term.
  • It will take a range of technologies including batteries, pumped storage hydro and new approaches to meet the storage demands of a net zero grid.

When you turn on a lightbulb – in 10, 20, or 30 years – the same thing will happen. Electricity will light up the room. But where that electricity comes from will be different. As the country moves toward net zero emissions, low carbon and renewable power sources will become the norm. However, it’s not as simple as swapping in renewables for the fossil fuels the grid was built around.

Weather dependant sources, like wind and solar, are intermittent – meaning other sources are needed at times when there’s little wind or no sunshine to meet the country’s electricity demand. Equally as challenging to manage, however, is what to do when there’s an excess of power being generated at times of low demand.

Energy storage offers a low carbon means of delivering power at times of low supply, as well as absorbing any excess of generated power when demand is low, helping to balance and stabilise the grid. As the electricity system transforms through a range of low-carbon and renewable technologies, the amount of energy storage on the UK grid will need to expand from 3 GW of today to over 30 GW in the coming decades.

The storage solution

Even as the UK’s electricity system transforms, from fossil fuels to renewables, the way the grid operates remains primarily the same. Central to that is the principle that the supply of electricity being generated must always match the demand on a second-by-second basis.

Too little or too much power on the system can cause power outages and damage equipment. National Grid needs to be able to call on reserve power sources to meet demand when supply is low or pay to curtail renewable sources’ output when demand drops. During the summer of 2020, for example, lower demand due to Covid-19 coupled with high renewable output resulted in balancing costs 40% above expectations.

“There is a lot of offshore wind coming online in Scotland, as much as 11 GW by 2030 and a further 25 GW planned,” explains Steve Marshall, a Development Manager at Drax.

Offshore wind farm along the coast of Scotland

“It’s great because it increases the amount of renewable power on the system, but the transmission lines between Scotland and England can become saturated as much as 30-40% of the time because there is too much power.”

Electricity storage can provide a source of reserve power, as well as absorb excess electricity. These capabilities are crucial for balancing the grid and ensuring that frequency remains within a stable operating range of 50 Hertz, as well as providing other ancillary services.

Whether it’s absorbing power or delivering electricity needed to keep the grid stable, in energy storage, timing is everything.

There are three main time periods electricity storage needs to operate over:

  1. Fast-acting, short term electricity

Because electricity supply must always match demand, sudden changes mean the grid needs to respond immediately to ensure frequency and voltage remain stable, and electricity safe to use.

Batteries are considered the fastest technology for responding to a sudden spike in demand or an abrupt loss of supply.

Battery technology has evolved rapidly in recent decades as innovations like lithium-ion batteries, such as those used in electric cars, and emerging solid-state batteries become more affordable and more commonplace. This makes it more feasible to deploy large-scale installations that can absorb and store excess power from the grid.

“Batteries are good for near-instantaneous responses. It can be a matter of milliseconds for a battery to deploy power,” says Marshall. “If there’s a sudden problem with frequency or voltage, batteries can respond – it’s something that’s quite unique to them.”

The speed at which batteries can deploy and absorb electricity makes them useful grid assets. However, even very large battery setups can only discharge power for around two hours. If, for example, the wind dropped off for a long period the grid needs a longer-duration supply of stored power.

  1. Powering day-to-day changes in supply, demand, and the grid

When it comes to managing the daily variations of supply and demand the grid needs to be able to call on reserves of power for when there are unexpected changes in the weather or electricity demand from users. Pumped storage hydro power offers a low carbon way to provide huge amounts of electricity, quickly and for periods that can last as long as eight or even 24 hours.

The technology works by moving water between two reservoirs of water at different elevations. When there is demand for electricity water is released from the upper reservoir, which rushes down a series of pipes, spinning water turbines, generating electricity. However, when there is an excess of power on the electricity system the same turbines can reverse and absorb electricity to pump water from the lower to the upper reservoir, storing it there as a massive ‘water battery’.

Pumped storage hydro is a long-established technology, having been developed since the 1890s in Italy and Switzerland. In the UK today there are four pumped storage hydro power stations in Scotland and Wales, with a total capacity of 2.8 GW.

Among those is the Drax-owned Cruachan Power Station in the Scottish Highlands. The plant is made up of four generating/pumping turbines located inside Ben Cruachan between Loch Awe and an upper reservoir holding 10 million cubic metres of water.

Turbine Hall at Cruachan Power Station

Pumped hydro storage facilities can rapidly begin generating large volumes of power in as little as 30 seconds or less. The ability to switch their turbines between different modes – pump, generate, and spin mode to provide inertia to the gird without producing power – make pumped storage hydro plants versatile assets for the gird.

“How Cruachan operates depends on weather,” says Marshall. “We make as many 1000 mode changes a month, that’s how frequently Cruachan is called on by National Grid.”

As the electricity system transforms there will be a greater need for flexible energy storage like pumped storage hydro, this is why Drax is kickstarting plans to expand Cruachan Power Station, however, the specific conditions needed for such facilities can make new projects difficult and expensive.

Cruachan 2, to the east of the original power station, will add up to 600 MW in generating capacity, more than doubling the site’s total capacity to more than 1GW. By increasing the number of turbines operating at the facility it increases the range of services that the grid can call upon from the site.

  1. Long-term electricity solutions

However, storage technologies as they exist today cannot alone offer all the solutions the UK will need to achieve its net zero targets. While technologies like pumped storage can generate for the better part of a day, longer periods of unfavourable conditions for renewables will need new approaches.

In March 2021, for example, the UK experienced its longest cold and calm spell in more than a decade, with wind farms operating at just 11% of their capacity for 11 days straight, according to Electric Insights.

The shortfall in the country’s primary source of renewable power was made up for by gas power stations. But in a net zero future, such responses will only be feasible if they’re part of carbon capture and storage systems or replaced by other carbon neutral or energy storage solutions.

Generating enough power to supply an electrified future, as well as being able to take pressure off the grid and provide balancing services will require a range of technologies working in tandem over extended periods.

Interconnectors with neighbouring countries, for example, can work alongside storage solutions to shed excess power to where there is greater demand. Similarly, rather than curtailing wind or solar power, extra electricity could be used for electrolysis to produce hydrogen. Other functions may include demand side response where heavy power users are incentivised to reduce their electricity usage during peak periods helping to reduce demand.

To achieve stable, reliable, net zero electricity systems the UK needs to act now to not only replace fossil fuels with renewables but put the essential energy storage and balancing solutions in place, that means electricity is there when you turn on a lightbulb.

Pumped storage hydro: why it’s key to a renewable future

Will Gardiner, Chief Executive Officer, Drax Group

3 July 2021

Opinion

In brief 

  • Pumped storage hydro (PSH) can provide the large-scale power storage that a grid increasingly dominated by wind and solar needs. 
  • This expansion project – called Cruachan 2 – would help enable greater deployment of renewables to the grid (approximately 300 GWh a year), deliver cumulative savings of more than £350 million for consumers, and support 900 green jobs.
  • Our community consultation for Cruachan 2 is open until 23 July. Please share your view.
  • Cruachan 2 could be operational by 2030, but for it to materialise we need the UK Government to commit to creating a route to market for this technology as well as continued support from the Scottish Government.

Great Britain has made incredible advances in wind and solar over the last decade. In fact, the Prime Minister has laid out ambitious plans to power every UK home by offshore wind by 2030. This is a bold and necessary step, but we must be cognisant of the nature of the power that wind and solar bring to the grid.

Unlike the fossil fuels on which the grid was built, intermittent power sources – such as wind or solar – only generate electricity when the wind is blowing or the sun is shining and turning them off  when they are generating too much power is wasteful. A grid overly reliant on these sources can fall victim to unfavourable weather conditions, leading to too little power generation and the risk of blackouts.

Before sunrise solar power plants

Grid scale flexibility and long duration energy storage technologies can address this, as they are able to preserve excess power when generation is peaking, and then release it back on to the grid when demand rises. The problem is, how do you create storage large enough to operate at grid scale? And how do you deploy that at a speed quick enough to meet sudden changes in demand?

We believe pumped storage hydro (PSH) is an essential component of a decarbonised, reliable electricity grid. The country is at a point where it needs more PSH to take the next step forward in its journey to a net zero economy – at Drax we are poised to help deliver it.

We now need the support and stability of technologies like pumped storage hydro to ensure our grid is not only greener, but stable, affordable and flexible.

Looking at Scotland specifically, its emissions reduction targets, its 2045 commitment for net zero and the challenges facing the Scottish Government today are very different to those it faced just a decade ago.

We entered a new era for climate action in Scotland at the beginning of the 2020s. The challenge for the next decade is to accelerate the decarbonisation of other sectors of the economy, much of it via electrification and to increase flexibility in the power system to help meet the challenge of operating large amounts of intermittent renewable power.

The power of pumped storage hydro

PSH works like this: in times of surplus electricity supply (for example, when weather allows for high volumes of wind and solar) it uses excess grid electricity to pump water up into high altitude reservoirs. Then, in times of high demand but low generation, that water is released back downhill, powering turbines that generate electricity as it goes.

Cruachan Power Station

Pumped Storage Hydro (PSH) at Cruachan Power Station

At Ben Cruachan in Argyll, Scotland, Drax already operates one of the largest PSH facilities in the UK. Built in the mid 1960s, Cruachan Power Station has a capacity of 440 megawatts (MW) and is able to power a city for 16 hours.

How do you create energy storage large enough to operate at grid scale? And how do you deploy it at a speed quick enough to meet sudden changes in demand?

For more than 55 years it has been an integral part of supporting the country’s grid, but it could do more. That’s why we’re planning an expansion, which we call Cruachan 2 – a project that would add another 600 MW of pumping and generation capacity to the plant for a total of 1.04 GW of power.

Engineer within Cruachan Power Station

Engineer within Cruachan Power Station

This would not only support the UK’s renewable strategy but enable more wind and solar onto the grid and deliver cumulative savings of more than £350 million to consumers as the network continues to decarbonise.

And on top of storage provision, the construction and operation of Cruachan 2 would directly create 300 jobs over the five-to-six-year construction period and support a total of nearly 900 jobs across the region – not to mention provide a range of ancillary grid services such as inertia that help will keep the network stable.

We’re progressing plans to have Cruachan 2 operational by 2030, but success will rely on the right policies and commitments from Government to instil investor confidence by reducing risk.

The policy needed to support pumped storage hydro

As highlighted in a recent report by the Renewable Energy Association, energy market mechanisms that were introduced to support low carbon and renewable generation (such as Contracts for Difference and the Capacity Market) are not able to support projects like Cruachan 2, which come with significant up-front costs and long build times.

However, if the Government were to investigate the possibility of introducing alternative mechanisms to support long-duration, large-scale energy storage technologies (similar to those used to enable interconnectors), it could pave the way for PSH to play a powerful supporting role in creating a greener, cleaner UK, where climate and economic sustainability go hand in hand.

Renewables are essential to the UK reaching net zero, and the work that has been done to increase their capacity on the country’s grid is testament to the Government’s ambition. But we now need the support and stability of technologies like PSH to ensure our grid is not only greener, but stable, affordable and flexible.

Go deeper

Find out more about Cruachan 2 and take part in our community consultation.

What is pumped storage hydro?

22 June 2021

Power generation

What is pumped storage hydro?

Pumped storage hydro (PSH) is a large-scale method of storing energy that can be converted into hydroelectric power. The long-duration storage technology has been used for more than half a century to balance demand on Great Britain’s electricity grid and accounts for more than 99% of bulk energy storage capacity worldwide.

How does it work?

The principle is simple. Pumped storage facilities have two water reservoirs at different elevations on a steep slope. When there is excess power on the grid and demand for electricity is low, the power is used to pump water from the lower to the upper reservoir using reversible turbines. When demand is high, the water is released downhill into the lower reservoir, driving the turbines the other direction to generate electricity.

Pumped storage hydro plants can also provide ancillary services to help balance the power system, such as inertia from spinning turbines, which ensures the system runs at the right frequency and reduces the risk of power cuts.

Why is pumped storage hydro important for energy transition?

Governments around the world are shifting from fossil fuels to renewable energy sources to meet their climate goals. But critically important power technologies such as wind and solar pose challenges for power grid operators.

Being weather-dependent, the supply from these renewables is intermittent. For example, wind farms accounted for almost a quarter of the UK’s total electricity generation in 2020, but on some days, less than 10% of the country’s electricity needs were met by wind. Changing weather patterns and extreme weather events with prolonged periods of little wind or reduced daylight are a further the threat to grid stability.

When output from renewables falls, grid operators mostly turn to gas-fired power stations to plug the gap. But relying on fossil fuels such as natural gas in the long term to balance the grid will compromise efforts to reach net zero emissions by 2050.

Pumped storage hydro facilities act as vast ‘water batteries’. They are a flexible way of storing excess energy generated by renewables, cost-effectively and at scale.

How can pumped storage hydro capacity be increased?

As old thermal power plants are decommissioned and renewables provide an increasing share of the electricity supply, storage capacity will need to grow if climate goals are to be met. Over the next two to three decades, Great Britain’s energy storage capacity alone will need to increase tenfold, from 3 gigawatts (GW) to around 30 GW.

Pumped storage hydro power stations require very specific sites, with substantial bodies of water between different elevations. There are hundreds, if not thousands, of potential sites around the UK, including disused mines, quarries and underground caverns, but the cost of developing entirely new facilities is huge. A more cost-effective way to increase storage capacity is by expanding existing plants, such as the Cruachan Power Station in Scotland.

Pumped Storage Hydro fast facts

Go deeper:

 

 

Capacity Market Agreements

11 March 2021

Investors
Cruachan pylons

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 8747R

T-4 auction – provisional results for existing pumped storage and hydro assets

Drax confirms that it has provisionally secured agreements to provide a total of 617MW of capacity (de-rated 582MW) principally from its pumped storage and hydro assets(1). The agreements are for the delivery period October 2024 to September 2025, at a price of £18/kW(2) and are worth around £10 million in that period. These are in addition to existing agreements which extend to September 2024.

T-4 auction – provisional results for new build system support assets

Drax confirms that it has provisionally secured 15-year agreements for three new 299MW (de-rated 284MW) Open Cycle Gas Turbine (OCGT) projects at sites in England and Wales(3). The agreements are for the delivery period October 2024 to September 2039, at a price of £18/kW(2) and are worth around £230 million in that period.

Artist’s impression of a Drax rapid-response gas power station (OCGT)

Artist’s impression of a rapid-response gas power station (OCGT)

These assets are intended to operate for short periods of time to meet specific system support needs. As the UK transitions towards a net zero economy, it will become increasingly dependent on wind generation and as such, fast response system support technologies such as these OCGTs are increasingly important to the energy system as a means to enable more wind to run more often and more securely.

The total capital cost of these projects is approximately £80-90 million each, with a build time of around two years.

A further OCGT project participated in the auction but exited above the clearing price and did not accept an agreement.

Drax will now evaluate options for all four OCGT projects including their potential sale.

Continued focus on biomass strategy and the development of negative emissions

In December 2019 Drax announced an ambition to become a carbon negative company by 2030 using Bioenergy Carbon Capture and Storage (BECCS) and the Group remains focused on its biomass strategy. In January 2021 Drax completed the sale of its Combined Cycle Gas Generation (CCGT) assets and in March 2021 ends commercial coal generation. Drax believes that its remaining portfolio of sustainable biomass, pumped storage and hydro will be amongst the lowest carbon generation portfolios in Europe.

Enquiries

Drax Investor Relations: Mark Strafford

+44 (0) 7730 763 949

Media

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Website: www.drax.com

Pumping power: pumped storage stations around the world

30 December 2020

Power generation
Loch Awe from Cruachan

Changing the world’s energy systems is a more complex task than just replacing coal power stations with wind farms. Moving to an energy system with more intermittent renewable sources like wind and solar will require greater levels of storage that can deliver electricity when it’s needed.

One of the long-established means of storing energy and using it to generate electricity when needed is through pumped hydropower storage. With upper and lower reservoirs of water, and turbines in between, these facilities act a bit like rechargeable batteries.

When there is excess electricity on the grid, the turbines are switched on to pump water from the lower to the higher reservoir (for example up a mountain or hill) where it’s stored. When electricity is needed, the water is released to flow from the higher reservoir toward the lower reservoir, passing through the turbines which generate electricity to send back to the grid.

Greater levels of intermittent renewables on energy systems around the world will make pumped storage all the more vital in helping to balance grids. Their mountainous locations also make pumped storage stations some of the most dramatic and interesting monuments in energy.

Here are some of the most interesting pumped hydro stations generating power and pumping water up mountains in the world:

1. The largest in the world (currently)

Bath County in Virginia, USA is dense with forests and mountain retreats, but below the scenery of the Allegheny Mountains lies the world’s biggest pumped hydro power station.

View of Appalachian mountains along Highway 220 in Warm Springs, Bath County, Virginia

The Bath County Pumped Storage Station has a maximum generation capacity of more than 3 gigawatts (GW) and total storage capacity of 24 gigawatt-hours (GWh), the equivalent to the total, yearly electricity use of about 6000 homes.

Construction began in March 1977 and upon completion in December 1985, the power station had a generating capacity of 2.1 GW. However, its six turbines were upgraded between 2004 and 2009 to over 500 MW per turbine. The power station’s upper reservoir can hold 14,000,000 cubic metres (m3) of water and its water level can drop by as much as 32 metres during operations.

While the amount of earth and rock moved during the construction of the dam and facilities would make a mountain more than 300 metres tall, the actual station occupies a relatively small amount of land to minimise its impact on the environment. The water from the upper reservoir has a use beyond power too – at times of drought it’s used to supplement river flow in the recreational area that surrounds the site.

2. The future largest in the world

Bath County will not be the world’s largest pumped hydro station for much longer. While China is already home to more of the top 10 largest pumped storage power stations than any other country, the Fengning Pumped Storage Power Plant in China’s Hebei Province will take the top position when completed in 2023, thanks to its 3.6 GW capacity.

Landscape of the Bashang grassland in Hebei, China

Construction first began on the monster project in June 2013 and is being developed in two 1.8 GW stages. The first stage is scheduled for completion in 2021, when six of the 12 planned 300 MW reversable pump turbine units roar into life.

The plant will serve Beijing-Tianjin-North Hebei electrical grid and highlights the rapid growth of renewables in the region. Fengning will act as a peaking plant to balance the expansive wind and solar parks in China’s northern Hebei and Inner Mongolia regions.

China has more installed pumped hydro storage capacity than any other country, thanks in large part to its extensive mountainous terrain (which can accommodate such facilities), as well as an increasing need to support growing intermittent renewable installations. The construction of Fengning, part of a pipeline of projects, will further the country’s capabilities, helping China reach as much as 40 GW of installed capacity in the coming years.

3. Most reversable turbines

Fengning will also take the record for the most individual turbine units in a pumped storage facility when it’s finished in 2023, a title that is currently jointly held by Huizhou Pumped Storage Power Station and Guangdong Pumped Storage Power Station. These two plants are the respective second and third largest pumped storage plants in the world today, each with eight reversable turbines.

Guangzhou City, Guangdong Province, China

While Guangdong Pumped Storage Power Station has a capacity of 2.4 GW, Huizhou has a slightly larger capacity of 2.448 GW. The increased number of turbines might mean more machinery to maintain and operate, but also offers the plants greater flexibility in how much electricity they absorb and generate.

4. Multiple dams and reservoirs

The Drakensberg Pumped Storage Scheme, located in the Drakensberg Mountains in the province of KwaZulu-Natal, South Africa, is a unique hydro facility thanks to its use of four dams. The Driekloof Dam, Sterkfontein Dam, Kilburn Dam and Woodstock Dam give the facility a generation capacity of 1 GW, and a total storage capacity of over 27 GWh. However, Drakensberg is not the largest facility in South Africa.

Drakensberg Mountains in South Africa

Drakensberg Mountains in South Africa

South Africa holds a total installed pumped storage capacity of nearly 3 GW from its four large facilities. The newest, and largest, is the Ingula Pumped Storage Scheme, which has a generation capacity of over 1.3 GW. Its name, ‘Ingula’, was inspired by the foamy river waters surrounding the facility and comes from the Zulu word for the creamy foam on the top of a milk vessel.

5. The oldest working pumped storage plant

Another country with the ideal terrain for pumped storage is Switzerland. The Alpine country’s landscape feeds water into Europe’s rivers such as the Rhine, making water a plentiful supply for the country’s energy. Hydropower as a whole accounts for around 57% of the country’s energy production and the country was one of the first to begin deploying pumped storage systems in the 1890s, although these were initially used for water management rather than supporting electricity generation.

Water dam and reservoir lake in Swiss Alps to produce hydropower

Switzerland is also home to the world’s oldest working pumped storage plant. The Engeweiher pumped storage facility was built in 1907 before reversable turbines were introduced in the 1930s. It was renewed in the early 1990s and is scheduled to continue operating until at least 2052.

6. The biggest in Europe

The Alps are also home to Europe’s biggest hydroelectric facility. In France, the Grand Maison hydroelectric power station operates in the Isère area of the Auvergne-Rhône-Alpes region, and has a capacity of 1.8 GW. During peak demand, it takes only three minutes for the station to supply its full 1.8 GW of power to the National Electricity Grid of France.

Grand Maison Hydroelectric Power Station

Sitting at an altitude of 1,698 metres the majority of the water that fills the upper reservoir, created by the Grand Maison Dam, comes from melted snow. This reservoir has a storage capacity of 140,000,000 m3 of water.

7. The biggest in the UK

Across the Channel, the UK also boasts impressive hydropower and pumped storage credentials, having used water for electricity generation since 1879. The UK has a total hydropower capacity of over 4.7 GW, including 2.8 GW of pumped storage, with the wet, mountainous landscapes of Scottish Highlands and Welsh countryside particularly well suited to hydropower facilities.

Dinorwig hydroelectric power station

The largest of these is the Dinorwig Hydro Power Station which sits at the edge of Snowdonia National Park in north west Wales, although it’s hard to spot as most of the machinery is found underground. With a total capacity of over 1.7 GW, this pumped storage plant can power 2.5 million homes and is known by locals as ‘Electric Mountain’.

8. The station lying between the lochs

Surrounded by Loch Etive and Loch Nant, and perched on the north side of Loch Awe, Drax’s Cruachan Power Station was built between 1959 and 1965, 1 km inside of a hollowed-out mountain in Argyll and Bute, Scotland. Upon completion, the power station, also known as the ‘Hollow Mountain’, was opened by Queen Elizabeth II and can currently generate 440 MW of hydroelectric power in 30 seconds, helping to maintain stability on the electricity grid.

Cruachan Dam in Argyll and Bute

A proposed sister station, Cruachan 2, which would stand adjacent to the existing facility, could enable Cruachan to produce up to twice as much power, increasing its support of renewables coming onto the grid.

9. The world’s smallest

The Goudemand apartment building in the city of Arras, France is home to an extremely small pumped storage hydroelectricity system, with no mountain in sight. The residential building was transformed in 2012 to become grid-independent through the installation of solar panels, wind turbines, batteries and a 200 square metre (m2) open air water tank sitting on its roof. This tank, 30 metres above the ground, acts as an upper reservoir and is connected to five 10 m2 plastic water tanks in the basement, the lower reservoir.

Arras, France

While the 3.5 KWh (kilowatt-hours) capacity of the building’s micro facility is small, it provides useful knowledge to researchers, opening up the possibility of small, modular pumped storage systems to be developed and deployed at scale in the future.