The benefits of pumped storage hydro to the UK

DNV conducted an in-depth analysis of the multiple benefits of PSH for the UK power system

Funding partners
ScottishPower, SSE, Scottish Government
This work has been commissioned by Scottish Renewables on behalf of the Pumped Storage Hydro Working Group.

It is widely acknowledged that greater flexibility is required in the electricity system of the UK to decarbonise at acceptable cost to consumers. In its Smart Power report, the National Infrastructure Commission estimated that greater flexibility could save consumers up to GBP 8 billion annually by 2030.
The UK electricity system already benefits from 24 GWh of pumped storage capacity, split across four sites, largely in Scotland. Around another 50 GWh has planning permission equivalent to the amount of electricity the UK uses on average in one hour.

DNV’s services
DNV conducted an in-depth analysis of the multiple benefits of PSH for the UK power system, as well as the many issues that obstruct its development. The new report outlines the investment case for pumped storage hydro and sets out 20 key benefits of the technology’s UK expansion. The study also identifies the political and economic barriers facing “one of the most cost-effective options for grid-scale energy storage”. The report, titled The Benefits of Pumped Storage Hydro to the UK, outlines the benefits of the technology.

The research methodology was based on three lines of actions:

  1. Market research of publicly and internally available information on pumped hydro storage
  2. International discussions across the network of consultants of DNV around the world
  3. Industry stakeholder interviews to get their views about the role and barriers for pumped storage hydro in the UK.

Benefits and barriers
The results from the study give the funding partners a clear insight in the pros and cons of applying PSH of which the main conclusions are summarized as follows:

  • From technical and economic perspectives, PSH is likely to be among the best and most cost-effective ways of providing large amounts of reliable flexibility in the UK.
  • In comparison with battery technologies, PSH provides very much larger unit sizes and is more suited for storing energy for periods of tens of hours.
  • PSH is an ‘infrastructure’-type investment: the long lead times combined with the high capital investment for this type of asset require extended periods of time for recovering costs: this is difficult under current market mechanisms for remunerating generation capacity and ancillary services.