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Renaissance for Pumped Storage in Europe

Consulting company ecoprog anticipates more than 60 new pumped-storage plants with a total capacity of about 27 GW will be built in Europe by 2020, with the market particularly booming in Spain, Switzerland and Austria. The main reason for this growth is the development of renewable energy throughout Europe, including intermittent sources.

By Mathias Zuber

The Alqueva multi-purpose project is the site of a pumped-storage project being built (photo copyright Alstom)

Many European countries are planning, constructing or upgrading pumped-storage facilities to deal with the growth of renewable energy and the related increasing share of intermittent electricity sources, such as wind and solar. Pumped-storage plants are uniquely situated to help integrate intermittent renewables because these plants can store electricity to balance load and can react quickly to changing grid conditions.

In April 2011, consulting firm ecoprog published results of a survey, The European Market for Pumped-Storage Power Plants. This report includes a detailed analysis of all essential trends in constructing and operating pumped-storage hydro plants; a differentiation of the current and future market volumes by country up to and including 2020; a description of about 170 pumped-storage plants currently operating, which represent more than 90% of the installed capacity in Europe; and a list of more than 50 new projects either under construction or being planned in the region.

This article provides some background on the state of pumped storage in Europe and regional breakdowns of development activity through 2020.

Background on European pumped storage

As of early 2011, about 170 pumped-storage plants with a total capacity of almost 45 GW were operating in Europe (see Figure 1, shown on page 16). Nearly 75% of the installed pumped-storage capacity in Europe is concentrated in eight countries, with more than half of this in four countries: Italy, Germany, France and Spain. This is due to the fact that the largest European energy industries need the largest capacities for storing electricity.

The UK is the only exception to this trend. In terms of population and the size of its energy industry, the country has comparatively small pumped-storage capacity.

This is largely due to the structure of the existing plants: almost 40% are gas-fired facilities, which can be used in a considerably more flexible way than other thermal plants. Hence, the UK needs only small storage capacities.

Throughout Europe, the average capacity of a pumped-storage plant is about 300 MW. The largest plants are in the countries that also have the most overall pumped-storage capacity. Again, the UK differs: there are few pumped-storage plants, but these are among the largest in Europe.

And, on average, European pumped-storage plants are older than 30 years. Two-thirds of them were built between 1970 and 1990 (see Figure 2, shown on page 18). The oldest pumped-storage plants are in Germany and Switzerland.

It is striking that the pumped-storage facilities in the countries with lower capacities tend to be younger. This can be explained by the respective national energy industries, as they began to develop much later and at a slower rate. Pumped-storage plants only became necessary when more large power plants were constructed.

The first building boom of pumped-storage plants, between 1970 and 1990, occurred because facilities were needed to draw the surplus electricity of the large fossil and nuclear plants in times of light load and to deliver sufficient amounts of electricity in times of peak load. After adequate pumped-storage capacity had been developed by the end of the 1980s, few new facilities were constructed. Between 1990 and 2010, only 15 plants with a total capacity of 5.6 GW were built in Europe.

After a long lean period, the market for pumped-storage plants is booming as never before. In the next 10 years, more pumped-storage plants will be constructed in Europe than in any other decade — both in terms of number and installed capacity. Altogether, about 60 plants with an installed capacity of about 27 GW will be built. This represents about 50% of the capacity of the existing plants and reflects an investment volume of almost €26 billion (US$36.5 billion).

Most of the largest new plants will be constructed in countries with large shares of wind and solar energy (like the Iberian Peninsula) or in neighboring countries with appropriate topographical conditions (like Switzerland or Austria).

A precondition for this construction boom is development of the power grids. In most cases, the existing grid structure is inadequate for absorbing and transporting the given amount of electricity to its storage location. For this reason, connections inside and between European countries must be expanded. Additionally, new techniques will need to be employed, enabling non-dissipative long-distance transportation of huge quantities of electricity. So-called high-voltage direct current (HVDC) transmission systems are already sporadically being used for this purpose.

The largest factor behind this boom is the increasing share of renewable energies in electrical generation portfolios, most notably growing wind and solar power. According to EU specifications, the share of final gross energy consumption from renewable sources is to increase to 20% by 2020. The current percentage is 11.6. The majority of this increase is supposed to be generated with wind power.

This poses a problem. Although the possibility of forecasting wind speeds is improving, wind energy cannot be delivered constantly or adequately to meet the current need. Hence, new and large electrical storage possibilities are needed to compensate for fluctuating grid frequency. Today, as well as in the years to come, there is only one technological and economic possibility to do this: pumped-storage hydro plants.

As of now, some of the electricity in countries with a large share of wind plants cannot be used. There is a lack of storage capabilities, especially when less electricity is needed, and there is a lot of wind (e.g. at night). In some countries, wind plants must be shut down to compensate for the load course and relieve the grids.

In conjunction with onshore wind plants, new renewable electricity generation sources particularly are supposed to be developed with offshore wind farms. In Germany, for example, the government is calling for 10 GW of capacity to be available from offshore projects by 2020. In the UK, this number amounts to more than 15 GW.

In some countries, the development of photovoltaics will have consequences similar to wind power. Electricity generation depends on solar radiation, which can vary considerably depending on the season but also in the short term, for instance cloudy sky vs. cloudless sky.

Germany, Austria and Switzerland

Over the next 10 years, most of the new pumped-storage plants in Europe will be constructed in Germany, Austria and Switzerland. German activity will consist mainly of expansions to existing plants, while new plants will be built in Austria and Switzerland. This is because almost all of the locations with suitable natural preconditions in Germany already are being used for pumped storage. However, some of the expansions will be very large, meaning Germany will still have one of the largest market volumes in Europe in 2020. A typical example for an expansion project in Germany is the 300 MW Riedl pumped storage plant. Among other companies, E.ON Wasserkraft and Verbund AG from Austrial are participating in the project, which is to be constructed by 2018.

The two largest pumped-storage plants in Germany are 1,060 MW Goldisthal in Thuringia and 1,050 MW Markersbach in Saxony. The Schluchseewerk complex in Baden-Wurttemberg, which consists of five pumped-storage plants, has a total capacity of about 1,800 MW. The country is now focusing on pumped-storage plant development in the Alpine region.

Austria and Switzerland both have nearly 5 GW of installed capacity in pumped-storage plants. The capacities of these countries will almost double by the end of 2020. The natural preconditions are perfect for the further expansion of pumped-storage plants. And because the countries are centrally located in Europe, it is attractive for neighboring countries to invest in pumped storage there.

The largest ongoing project in Austria is extension of the Limberg complex, where the 480 MW Limberg 2 pumped-storage plant is supposed to be completed by 2012. In addition, the expansion of the Limberg 3 plant by a further 480 MW by 2020 is already planned.

One of the largest pumped-storage projects in Switzerland is the 1,000 MW Limmern. It is under construction and supposed to be completed by 2015. The Tierfehd pumped-storage plant already exists at the same location, but it has a capacity of only 140 MW.

Southern Europe

Spain and Portugal are the most dynamic markets for pumped storage in Southern Europe. Despite already having one of the largest amounts of storage and pumped-storage plants in Europe, Spain will construct more capacity in the pumped-storage sector than any other European country over the next 10 years, ending with the largest volume of this market.

Private electricity generating company Iberdrola is the company behind much this development. Its largest project is expansion of the 635 MW La Muela pumped-storage plant, which is going to grow by a capacity of 800 MW with the addition of La Muela II. The project is planned to be completed as early as 2012.

Beyond its projects in Spain, Iberdrola wishes to complete construction of a 1,200 MW pumped-storage plant in Portugal by 2018. With a connection of high-voltage power lines, this new capacity also is to be provided to the Spanish market. The installed capacity of pumped-storage plants in Portugal would almost double with this project.

Scandinavia

The Scandinavian countries do not need pumped-storage plants for their energy economy because the grid can be adequately balanced by switching on and off the turbines at conventional hydro plants with reservoirs. However, there are plans to use pumped-storage plants to store electricity from western industrial nations (similar to the situation in Switzerland and Austria). Norway and Sweden in particular have large reservoirs that could be retrofitted to a pump operation. A precondition for this, however, is an adequate connection to the grid.

A first step in this direction is the network connection between Norway and Germany (NorGer), which is to be completed by 2015. The HVDC cable to be used will have a capacity of 1,400 MW. Further transmission cables with smaller power capacities already are in operation between the Netherlands and Norway and between Denmark and Norway. Ecoprog expects new pumped-storage facilities to be developed due to the intensified integration of Norway and Sweden into the European energy industry, which will continue to increase in the future.

The 1,000 MW Limmern facility, currently under construction at an existing reservoir, is one of the largest pumped-storage projects in Switzerland. Limmern is scheduled to be completed by 2015. (photo copyright Alstom)

Most of the new pumped-storage plants in Scandinavia will be built in Norway. Because Norway has the largest installed capacity in hydro plants of all European countries and most of them are storage plants, the new pumped-storage plants will be expansions of existing storage plants. Indeed, at this time, only around 5% of the total installed hydroelectric capacity has the equivalent pumping capacity.

Eastern Europe

The paradigm in Eastern Europe is different than that in the Western European countries. Wind and solar power play only a minor role. New pumped-storage plants are being constructed in countries with low capacities — for example in Romania, Lithuania, Latvia, Estonia, Slovenia and Hungary, where pumped-storage plants are mainly needed to draw electricity from fossil and nuclear plants. This development can be compared to the 1970s and 1980s building boom in the Western European countries. The advanced economies in Poland and the Czech Republic have already completed this phase, and no new pumped-storage plants are scheduled to be constructed in these countries.

The fastest and most dynamic growing market is Romania. The pumped-storage capacities are small, despite the fact that the natural preconditions are good for waterpower plants. In the years to come, several pumped-storage plants are planned. Installed capacity will more than triple by 2020. Romania needs new pumped-storage plants especially for accepting electricity from large fossil and nuclear plants. In this respect, not enough capacity was constructed during Europe's booming years.

Lithuania is another promising market in the east. One project is to extend the Kruonis pumped-storage plant. In the long term, the installed capacity is supposed to double. As a first step, one new 225 MW turbine will be installed. Altogether, the expansion is planned to include four 225 MW units. Afterwards, the pumped-storage plant would have an installed capacity of 1,800 MW.

UK and Ireland

New pumped-storage plants are finally being built again in the UK. After more than 20 years since the last such developmment, new plants are being planned in Scotland. Scottish & Southern Energy pic (SSE) wants to commission the facilities in 2020 at the latest. The plants are supposed to help integrate the growing wind capacities in the UK.

By far the largest existing pumped-storage plant at the time was constructed in 1983 in Wales, close to Caemerton.

Six turbines in the Dinorwig plant provide an installed capacity of about 1,700 MW. To this day this facility remains one of the largest pumped-storage plants in Europe. First Hydro Co., a joint venture of International Power plc and Mitsui & Co. Ltd., operates the facility. In addition, the company also operates a 360 MW pumped-storage plant in Wales, which went on line in 1963.

France and Benelux

No large pumped-storage projects are planned in France or Benelux (Belgium, the Netherlands and Luxembourg). The capacities in France are large enough to draw the surplus electricity from the nuclear power plants and, hence, to produce peak load and the needed operating reserve. In contrast to other large economies like Germany or Spain, wind and solar power only play a minor role in France's fuel mix. However, new pumped-storage hydro plants will be needed with the increasing number of onshore and offshore wind plants planned for the future.

Principally, there still are potential locations in France — in contrast to Benelux, where they are lacking. Due to the topological conditions, it is not possible to construct new pumped-storage plants here. Only the capacity of the 1,096 MW Vianden plant in Luxembourg is currently being extended.

Mathias Zuber, a consultant with consulting company ecoprog GmbH in Cologne, was one of the principal authors of the pumped-storage market survey. Ecoprog specializes in environmental and energy economics and publishes market surveys for topics within the energy, environmental and waste businesses.

The data in this article comes from a report published by ecoprog: The European Market for Pumped-Storage Power Plants 2011/2012. It analyzes the market for plants and operators of pumped-storage plants in Europe and can be ordered for €2,900 (US$4,172) at www.ecoprog.com.

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