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Power shower: How hydro storage can keep energy flowing

Power shower: How hydro storage can keep energy flowing
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ARTICLE TYPE
Sustainability Soapbox
TOPIC
Responsible Investing
PUBLISHED
October 27,2022
READ TIME
2 mins
AUTHOR
Sajeer Ahmed
SHARE
Back
ARTICLE TYPE Sustainability Soapbox
TOPIC Responsible Investing
PUBLISHED October 27,2022
READ TIME 2 mins read
AUTHOR Sajeer Ahmed
SHARE

October has seen the weather in the United Kingdom turn wet and windy. While such weather makes hillwalking more of a challenge, it is certainly a welcome sight to see the UK's wind turbines whirring away productively.

 

Over the course of the week to 7th October, the share of electricity generation from renewable energy sources shot up to 50%. So productive were the UK's windfarms that we were exporting our surplus electricity to our European neighbours via a network of interconnectors. However, the wind doesn't always blow, and the sun doesn't always shine. It is no surprise then that the share of electricity generated from renewable sources over the course of the last 12 months was a more modest 28%.

 

Figure 1 – Last week the UK generated most of its electricity needs from renewable energy. Indeed for most of the week we were able to export our surplus to Europe.

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Figure 2 – However, over the last year renewable energy was only 28% of generation.

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Source: https://grid.iamkate.com/ 

 

As we transition to net zero, a key question becomes how do we bridge the gaps between intermittent generation and fairly predictable demand? This question has taken on renewed urgency given natural gas, hitherto marketed as a reliable transition fuel, has proven itself to be an erratic source of energy due to the conflict in Ukraine.

 

As well as reliable baseload, energy storage is a key component to solving the intermittency of renewable energy sources. Energy storage technologies are not keeping pace with energy generating technology, and as we progress further in the latter field, we are only losing out in the former. Headlines typically focus on the revolutionary new storage technologies such as battery storage, green hydrogen, or even gravity-based systems. Yet many of these technologies are still emerging and may possibly take years to achieve commercial scale. Unfortunately, storing energy in the likes of a battery requires a large amount of investment. Furthermore, due to a lack of standardisation of battery storage, often it requires individual energy generating projects to have specialised equipment, again only adding to the cost.

 

However, the hilly geology of large parts of the UK lends itself ideally to the existing and proven technology of pumped hydro storage. Pumped hydro is based on two reservoirs at different elevations. When there is surplus electricity generation, water is pumped from the lower reservoir to the upper reservoir. When demand for electricity outstrips supply, water is released from the upper reservoir and turns a turbine to generate electricity.

 

SSE Renewables is currently in the process of undertaking exploratory works for the UK's largest pumped hydro scheme called Coire Glas. Situated in the Scottish Highlands, this 1500MW scheme could store enough energy to power three million homes for 24 hours. That is more than 10% of UK households. One cannot help but notice that fast tracking schemes such as Coire Glas could help accelerate the UK's journey to net zero.

 

While it makes sense to direct capital towards new and emerging technologies we must recognise these technologies often have a long lead time to commercialisation. To borrow from the political parlance, our focus must thus turn also to the ‘oven ready’ technologies which can be implemented today such as pumped hydro storage.  

 

After all, we have the wind, we just need somewhere to store the energy it can generate for us.

Important disclosures

More about the authors

Sajeer Ahmed Investment Manager

Sajeer Ahmed is a member of Aegon AM’s global equities team and co-manages the Aegon UK Sustainable Opportunities strategy.

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