Exclusive: Big time backers revive $2B Columbia River Gorge energy storage project

November 7, 2017

Portland Business Journal

A massive proposed energy storage project alongside the Columbia River has new life.

Confident that the $2 billion project has a chance, Rye Development, which calls itself the largest developer of new hydropower in the U.S., has applied for a preliminary federal permit for the Goldendale Energy Storage Project, 110 miles upriver from Portland.

The project would use an established technology, pumped storage, that has proven difficult to build in the U.S. in recent decades. It works by pumping water uphill into a reservoir when energy is cheap and plentiful, and then releasing the water downhill through generating turbines when the energy is needed.

Water for the project would come from the Columbia, but because the system would include a lower reservoir and operate in a closed loop, it would require only periodic recharging from the river.

The Goldendale project is largely unchanged from the JD Pool Pumped Storage Project that the Klickitat Public Utility District pursued unsuccessfully for several years until 2015. The Klickitat PUD, which holds the water rights, is still a participant, but along with Rye in a lead role the project also has the backing of National Grid, a big electricity and gas transmission company.

“The case that we see with storage is a good one in the hydro world, especially in the Western U.S. with extremely low power rates and negative pricing related to solar oversupply,” Erik Steimle, vice president at Rye, said. “We see pumped storage as a real opportunity.”

The site next to the John Day Dam is considered one of the best for pumped storage in the West, with more than 2,000 feet of vertical rise over barely a mile of horizontal distance. As proposed, the project would produce up to 1,200 megawatts, more than double the power output of the Boardman Coal Plant that Portland General Electric operates in Eastern Oregon.

It would store 14,745 megawatt-hours of electricity — more than 100 times the capacity of the world’s largest battery energy storage project now under construction by Tesla in Australia.

In its earlier incarnation, project permitting ostensibly ran aground because federal regulators feared the lower reservoir would conflict with the cleanup of the shuttered Columbia Gorge Aluminum smelter.

The new application includes a letter from Washington’s Department of Ecology attesting the department “is supportive of the proposed project and believes that it will not hinder the cleanup process.”

Confidence that the project can run the permitting-licensing-construction gantlet coincides with an improved business case, the backers said. That’s what lured Rye and National Grid to it.

Nate Sandvig, a director for National Grid, said a number of utilities in the West could take advantage of the resource as they shut down coal plants and move to integrate more intermittent renewable energy into their systems.

“Their options in terms of capacity are increasingly limited,” Sandvig said. He noted that even natural gas plants, whose flexibility can help balance renewables, are becoming difficult to build. Portland General Electric found that out earlier this year when protests from environmentalists helped turn back the utility’s plans for possible new gas plants.

Pumped storage could play that balancing role, but it’s been hindered by long permitting, licensing and construction timelines, and high costs. The U.S. Department of Energy noted earlier this year that there were 38 proposed projects in the pipeline, including “32 at the earliest stage of project development which has a very high attrition rate.”

Rye’s Steimle, however, said the company has been able to trim the process for large projects from seven to 10 years down to five, boosting return on investment dramatically.

As for footing the bill, the Sacramento Municipal Utility District last year canceled a 400 MW pumped storage project it had been pursuing, citing a hefty $1.45 billion price tag that would limit its ability to pursue other projects. But Steimle said Goldendale would have an advantage in that regard: “It wouldn’t be designed for one off-taker — there are multiple parties that have the interest and need.”

Pete Danko
Staff Reporter