Navajo Nation land could host 2.2 GW pumped hydro storage station

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From pv magazine USA.

Pumped hydro storage could be coming to Navajo Nation lands in the U.S. as the Federal Energy Regulatory Commission has accepted developer Daybreak Power’s application for a preliminary permit for its proposed, 2.2 GW Navajo Energy Storage Station.

The permit decision was described as an “important early milestone” but is some way short of kick-starting development – the permit hasn’t been issued yet. If it is, there will still be planning and further permitting hurdles to overcome.

The $3.6 billion project would sit on Navajo Nation lands near the south shore of Lake Powell in San Juan County, Utah.

Interestingly, the project plans outline the use of electricity transmission infrastructure formerly linked to the now-retired Navajo Generating Station coal facility.

If built, the project would clock in at 2,230 MW, which could provide 10 hours of continuous generation, for average annual generation of 3,365 GWh. However, as the company told pv magazine: “These are ballpark figures based on the proposed installed capacity and estimates for how often we’d be generating. We expect the figures to change as we refine the project and conduct engineering [and] feasibility studies.”

The planned project would power the pumping of water to the upper reservoir directly from solar and wind facilities, rather than charging the pump with some of the energy generated by each cascade, as happens in many pumped storage schemes.

The developers may seek to raise investment by selling the power generated through a power purchase agreement although grid operators may invest in the project as a transmission asset.

Finance

When asked about financing options, a Daybreak representative said: “We will be seeking PPAs to underpin financing in a traditional way, with an expectation that California’s move toward a state-wide procurement process for long-duration storage could offer a big boost.

“Alternatively, there are dockets under way in California and elsewhere to improve mechanisms for providing revenue requirements for storage as a transmission asset. We will be exploring both of these avenues and see what emerges.”

The Daybreak spokesperson added: “Large-scale energy projects on tribal lands may be eligible for DOE [Department of Energy] loan guarantees – we also will be exploring that possibility – which could ease the financing burden considerably.”

Three-year permit

We could know soon, as the application specifies financing plans will be developed during the three-year term of the preliminary permit.

Not much is known about Daybreak Power, which was founded in 2018 and whose only other planned project is the Next Generation Pumped Storage facility, a 1.54 GW energy storage project planned around five miles from the Hoover Dam, on the Nevada-Arizona border.

Pumped-hydro storage is becoming more attractive as renewable energy penetration grows. The technology is also becoming more financially viable, as outlined in Pumped Energy Storage: Vital to California’s Renewable Energy Future, a report by UC San Diego professor David Victor and five co-authors.

That report, covered in full by pv magazine USA’s Will Driscoll here, found the higher capital costs of pumped storage over battery alternatives are outweighed by the longer lifetime of the former option, leading to a lower levelized cost of energy.