Private entity sought to develop San Diego pumped-storage energy facility

By Jay Landers – 8/30/2021

In 2018, the state of California updated its Renewables Portfolio Standard to call for obtaining 60% of its power from renewable energy sources by 2030. At the same time, the state also mandated that its electricity system be powered solely by carbon-free, renewable energy sources by 2045. Meeting these ambitious targets will require no shortage of technological developments, particularly batteries or other means of storing electricity generated by intermittent, renewable energy sources, especially solar and wind power.

As part of its recently enacted budget for 2021-22, California included funding to help foster the development of one such storage method, known as pumped-storage hydropower. In particular, the budget provided $18 million to the city of San Diego and the San Diego County Water Authority for use in advancing their planned joint project known as the San Vicente Energy Storage Facility.

The funding will enable the two entities to issue a request for proposals in September for a private partner willing to develop the project at its own expense.

The roles of pumped storage

Typically, pumped storage entails pumping water from a lower reservoir to a higher reservoir during off-peak hours when electricity demand is low and energy production exceeds demand. During periods of peak demand, the water is released from the upper reservoir to the lower reservoir to generate additional power. As the water flows downhill, it powers turbines that generate electricity, which is then transmitted to the electrical grid.

Increasingly, pumped storage is being viewed as a way to take advantage of excess electricity produced during the day by renewable energy sources, primarily solar and wind. In essence, these hydropower facilities act as giant batteries, storing renewable energy for use during periods when renewable energy generation cannot meet demand. This is the approach that the proposed San Vicente Energy Storage Facility would take.

Project components

The new facility would take advantage of the water stored behind the existing San Vicente Dam, near Lakeside, Calif., says Neena Kuzmich, P.E., the deputy director of engineering for the SDCWA. “The project will build a new upper reservoir that will hold approximately 8,000 acre-ft at a higher elevation,” Kuzmich explains. “There will also be a tunnel system with an underground powerhouse containing four reversible pump turbines that would connect the two reservoirs.”

In 2014, the city of San Diego and the water authority completed a joint effort to raise the city-owned dam by 117 ft, increasing its storage capacity by more than 150,000 acre-ft (see “Vulnerable No More,” Civil Engineering, November 2016, pages 64-71). Today, the San Vicente Reservoir can hold up to 247,000 acre-ft, Kuzmich says. Of this amount, the SDCWA owns 157,000 acre-ft of storage capacity, while the city owns the rest.

Ultimately, the San Vicente Energy Storage Facility could store as much as 500 MW of capacity for eight hours, or the equivalent of 4,000 MW/hr per day of energy, according to a project fact sheet from the city and the SDCWA. “When operating, the project will provide enough energy for about 135,000 households,” the fact sheet states.

The location of the San Vicente Energy Storage Facility is ideal from the standpoint of transmitting energy generated by the project. “San Vicente Reservoir is near major electricity transmission interconnection facilities, which would allow the project to play a central role in integrating solar and wind energy from across the Southwest for use in San Diego County,” according to a July 16 SDCWA news release announcing the state funding for the project.

Next steps

As for funding, the $18 million “will cover the environmental reviews, the preliminary engineering, as well as the activities related to obtaining a (U.S. Federal Energy Regulatory Commission) license” for the project, Kuzmich says.

These activities are to be conducted by whichever “full-service team” ultimately is selected by the city and the SDCWA to implement the San Vicente Energy Storage Facility, she notes. The selected team also would “prepare an economic pro forma model to determine the required revenues to recover their costs,” Kuzmich says.

Assuming the project goes forward, the selected team “will fund and finance the implementation work” and then own and operate the completed facilities, Kuzmich says. The project developer would accrue the revenues associated with electricity generation. In turn, the city and the SDCWA would lease water from the San Vicente Reservoir to the developer for use in the pumped-storage facility, Kuzmich says. Revenues realized from the leasing arrangement would be split equally between the city and the water authority.

After advertising the RFP in September, the SDCWA expects to hold an interview process “towards the end of the year,” Kuzmich says. The water authority’s board then would approve negotiating with a potential developer. “That would be the basis for developing a project development agreement,” she says. Any completed agreement would have to be approved by the water authority’s board as well as San Diego’s city council, Kuzmich notes. “We’re hoping that by the middle of next year, 2022, that we’ll be able to complete negotiations for the project development agreement,” she says.

The initial activities related to environmental reviews, preliminary engineering, and licensure are expected to “take about four years to complete,” Kuzmich says. Construction is expected to wrap up in 2030. A preliminary estimate put the cost of the facility at about $1.5 billion, Kuzmich says. “But until the developer prepares a detailed cost model, the actual cost is not known,” she notes.

As envisioned by the city and the SDCWA, the energy storage facility would be completed at no cost to themselves. However, energy rates would later be increased to account for the operations of the facility, according to Kuzmich.

Multiple benefits

For the city of San Diego, the San Vicente Energy Storage Facility offers certain key benefits, says Alexandra Berenter, a senior manager of external affairs and water policy within the mayor’s office. “It will help avoid rolling blackouts in our area through on-demand energy production, and it will help meet both state and local climate goals,” Berenter says. “The project also could mitigate costs for water ratepayers across the San Diego region by generating additional revenue to help offset the cost of water purchases, storage, and treatment.”

At the same time, the project is designed to protect against the low reservoir levels that have forced at least one major hydropower facility in California to shut down operations in recent weeks. In early August, the California Department of Water Resources removed the 644 MW Hyatt Powerplant at Lake Oroville from operation because of declining water levels in the reservoir.

“This is just one of many unprecedented impacts we are experiencing in California as a result of our climate-induced drought,” the DWR said in an Aug. 5 statement. “California and much of the western part of the United States are experiencing the impacts of accelerated climate change including record-low reservoir levels due to dramatically reduced runoff this spring.”

Raising the height of the San Vicente Dam increased the extent to which the dam can carry over storage from one year to another. Therefore, the San Vicente Reservoir is less susceptible to annual fluctuations in runoff compared with other reservoirs in the state. For this reason, the reservoir “provides significant reliability,” Kuzmich says. “The additional water volume that was achieved with raising the San Vicente Dam provides enough water to reliably run this energy storage facility,” she notes. “That’s unique about this project.”

If completed, the new pumped-storage facility would be the fifth such plant in California. In fact, the SDCWA owns and operates one of those existing installations. The 40 MW Lake Hodges Pumped Storage Facilities includes a reservoir located below the water authority’s Olivenhain Reservoir. A tunnel connecting the two reservoirs conveys water through an underground pump station housing two pump turbines, each capable of generating 20 MW of electricity.

Although similar in layout, the 500 MW San Vicente Energy Storage Facility would be more than 12 times the size of its Lake Hodges counterpart, Kuzmich notes.

Funds for Pumped Storage Hydro Expected To Help Propel California’s Clean Energy Future

By: Cameron Schilling, Vice President, Market Strategies and Regulatory Affairs, NHA

Employees working at the San Diego County Water Authority and the City of San Diego likely won’t be taking much of an August vacation. Instead, many of them will be gearing up for preliminary studies, environmental reviews, and licensing activities for the proposed San Vicente Energy Storage Facility.

That’s because the facility – being proposed in partnership by the city and the county – received a shot in the arm in July 2021, when California Governor Gavin Newsom signed the state budget into law. Specifically, the budget includes $18 million in funding – enough to advance the project through initial design, environmental reviews, and the federal licensing process.

The proposed 500-MW project would be located outside of San Diego. It is designed to be closed loop or “off-river,” which means the facility will have few environmental impacts to the local area.

The city and county say the project is vital to supporting the grid’s integration of variable resources like wind and solar. Here’s an excerpt from a news release on the San Diego County Water Authority’s website:

“California sources nearly one-third of its power from renewables, mainly solar and wind. The target for renewable energy in California is 60% by 2030. Such a major shift to renewables will require new kinds of investments, markets, and business practices. Electric grids need to be more flexible; new kinds of power supplies will help deliver energy flexibility when needed; and new pricing systems are needed to send clear signals to developers and financial markets that these projects need to move forward.

Pumped energy storage projects are a major piece of the solution. They are designed to store excess renewable energy from solar and wind during the day, and then discharge that energy when energy use increases in the evening and renewable energy is not available.

Why It Matters

California has one of the strongest renewable portfolio standards (RPS) goals in the United States – to  reach 100% of retail sales coming from renewables by 2045. The state is the tip of the spear for regions who are trying to integrate renewables in a cost-effective, reliable, and swift manner.

As the electric power blackouts of 2020 demonstrated, that aggressive goal is being met by the stark reality facing grid operators who must balance load and demand on a 5-minute basis.

In recent years, grid operators have struggled with the “duck curve” with solar generation peaking in the middle of the day and receding at the same time load increases for the evening residential load. The end result is a daily 8-GW ramp in less than three hours that cannot be reliably filled with solar or wind.

The California grid will need roughly 50 GW of long-duration storage by 2050. In 2019, backers of the proposed San Vicente Energy Storage Facility released a whitepaper detailing the value this facility would bring to Southern California. The paper explained how the facility will be critical to serving both the morning and evening peak, while also lowering costs by absorbing excess solar in the middle of the day. Two years later, that need is critical as ever.

What’s Next? Still a Long Way to Go

While the $18 million in funding is a positive development, the proposed project still needs to be licensed by the Federal Energy Regulatory Commission (FERC) — a process that can take 3 years.

In 2018, Congress and FERC adopted a 2-year licensing process for closed loop pumped storage and for adding power components to existing dams. However, that expedited process requires the applicant to come to the Commission with a near completed application. So, rather than streamlining the permitting, the 2018 law merely truncated the same laborious process into a much quicker time frame. This is why no proposed pumped-storage projects have successfully applied for the expedited licensing.

All this means that the San Vicente Energy Storage project still has many hurdles ahead.

Yet, the $18 million from the state means the project can proceed into the next phase. “This $18 million in State funding is the jump start we needed for the City of San Diego and the San Diego County Water Authority to move forward with the environmental permitting and licensing that is needed,” said Gary Bousquet, Deputy Director of Engineering at San Diego County Water Authority.

At the National Hydropower Association (NHA), we see this project, and many others like it, will bring significant value to a California grid that is starving for long-duration storage.

Opinion: San Vicente hydroelectric project a smart way to make power grid more resilient

It will provide electricity at night after solar power goes slack

By The San Diego Union-Tribune Editorial Board

July 29, 2021 4:56 PM PT

The editorial board operates independently from the U-T newsroom but holds itself to similar ethical standards. We base our editorials and endorsements on reporting, interviews and rigorous debate, and strive for accuracy, fairness and civility in our section. Disagree? Let us know.

The state government’s decision to provide $18 million to fund preliminary work on state and federal approvals for the long-anticipated San Vicente Energy Storage Facility — advocated by the San Diego County Water Authority and the city of San Diego — makes the $1.5 billion project significantly more likely to come to pass. The great news is that the “pumped hydro” facility at the San Vicente Reservoir near Lakeside will strongly shore up available energy supplies at night after solar power is no longer directly available.

The project will require the building of another, much smaller reservoir at a higher elevation than San Vicente. During the day, when energy supplies are plentiful, water will be pumped to the higher reservoir. At night, when needed, that water can be released into the lower reservoir, generating hydroelectric power. The project will generate enough electricity for 135,000 households and make it easier for the region to keep the lights on as it pursues a statewide goal of ending all use of energy sources that generate greenhouse gases by 2045.

The $1.5 billion price tag may seem daunting. But the Water Authority says the $18 million in state funds is the only money that will be taken from taxpayers. The authority and the city will begin looking for a private developer to partner with on the project next month. That developer will fund the project and then recoup its investment on the back end after the facility begins generating power. Based on what’s known, this seems like a welcome example of thoughtful government in action.

First steps taken to make pumped hydro energy storage project at San Vicente Reservoir a reality

$18 million from state budget earmarked for joint effort between the city and SD County Water Authority

By Rob Nikolewski

July 26, 2021 3:03 PM PT

With an $18 million boost from the state, a major energy storage project using hydroelectric power is taking shape at the San Vicente Reservoir, nestled in the Cuyamaca Mountains near Lakeside.

The long talked about San Vicente Energy Storage Facility — proposed by the city of San Diego and the San Diego County Water Authority — received the funding earlier this month when Gov. Gavin Newsom signed the state budget. The $18 million will be spent to tackle some of the preliminary work needed to make the “pumped hydro” project a reality, such as initial design, environmental reviews and federal licensing.

“We believe the project is a critical component to meeting the state’s needs for integrating renewables” into the power grid, said Gary Bousquet, deputy director of engineering at the County Water Authority.

Next month, the city and the Water Authority expect to issue requests for proposals and eventually line up a private partner to take on what’s estimated to be a $1.5 billion construction and development project.

Pumped hydro projects have been part of the nation’s energy grid for more than 100 years. The concept is pretty basic: Using turbines, water is pumped from one reservoir up to another at a higher elevation. The water is then released and the ensuing rush of water generates electricity.

Using pumped hydro projects as a means of storing energy has taken on a greater focus as California moves forward on its goal to derive 100 percent of its electricity by 2045 — if not sooner — from sources of power that do not release greenhouse gases into the atmosphere.

California’s grid has integrated more renewable energy sources, but solar and wind are intermittent — that is, solar power is produced only when the sun shines and wind power flags when the breezes don’t blow. Other sources are needed to fill in the gaps. Natural gas can do the job, but it is a fossil fuel.

Energy storage, such as batteries, has increasingly become a potential solution. But so has pumped hydroelectric storage, and that’s what the city and county are looking for the San Vicente Energy Storage Facility to do — providing an estimated 500 megawatts of electricity when the grid needs it.

For perspective, when the San Onofre Nuclear Generating Station was up and running, it accounted for a little over 2,000 megawatts of power.

In addition, while the duration of battery storage usually is four hours, the San Vicente Energy Storage Facility would provide electricity for a longer duration — for eight hours and 4,000 megawatt-hours per day. The project is expected to provide enough energy for about 135,000 households.

The already existing San Vicente Reservoir that holds up to 247,000 acre-feet of water would act as the lower reservoir, and an upper reservoir estimated to hold about 8,000 acre-feet of water would be built at a higher elevation into the hillside. A tunnel system and an underground powerhouse containing four reversible pump turbines would connect the two reservoirs.

When there’s plenty of solar and wind getting generated during the day, “you can pump water up the hill,” Bousquet said. “And then at the end of the day when everybody comes home from work and air conditioning is turned on and the solar is coming offline, you could energize this facility, flow water downhill and meet the needs (of the grid) during that time.”

Electricity from the project can be fed into a nearby San Diego Gas & Electric substation.

David Victor, a UC San Diego professor who co-directs the university’s Deep Decarbonization Initiative, has been a strategic consultant to the city of San Diego on the San Vicente Energy Storage Facility. Victor says pumped hydro projects should be seen as a “quiver of arrows the state needs to have when you put a lot of renewables” on the grid.

“This is to some degree uncharted territory,” Victor said. “There’s no large grid that ever made such a transformation so quickly as what’s going on in California … There’s a lot of that that still need to be worked out with regard to the grid of the the future for California, but one of the things that all the models point to is that there’s this big increase in the need for storage of different types.”

The San Vicente project will be a closed-loop system that will hold water that is not reliant on runoff so it should be insulated from year-to-year fluctuations that can hamper hydropower production. The Water Authority said the project will not interfere with existing water supplies, water quality, fisheries or recreational activities at San Vicente.

“Over the last 20 years, the Water Authority and the city have built the emergency storage project, which raised San Vicente Dam, and behind the dam we keep a supply of water for emergencies,” Bousquet said.

After the request for proposals go out in the coming weeks, Bousquet said potential partners will be interviewed. Eventually, the San Diego City Council and the Water Authority Board will approve the entity selected to proceed with the environmental and licensing work. The project is scheduled to be completed in 2030.

“Once we have the project development agreement, the developer puts up all the money to advance the project,” Bousquet said. “They get financing and they put all that money upfront and then they collect their money on the backend once the facility is in operation. So one of the key benefits is that no taxpayer dollars are needed to develop the project” beyond the $18 million coming from the state budget.

The $18 million figure includes California Environmental Quality Act and federal government’s National Environmental Policy Act reviews, as well as licensing from the Federal Energy Regulatory Commission.

There’s already a pumped hydro storage facility in San Diego. Lake Hodges has a two-turbine pumphouse that sends water up 770 feet from the city-owned Hodges Reservoir to the the Water Authority’s Olivenhain Reservoir more than a mile away, generating some 40 megawatts of power on demand. At 500 megawatts, the proposed San Vicente project would generate more than 12 times the electricity of the Lake Hodges facility when at full capacity.

According to the California Energy Commission, four pumped storage facilities are used to help California’s grid during times of peak energy demand: Castaic Lake in Los Angeles County, with 1,331 megawatts of nameplate capacity (generation under ideal conditions); Helms in Fresno County, with 1,212 megawatts; Eastwood in Fresno County at 200 megawatts; and Lake Hodges.

San Vicente Energy Project allocated $18 million in state budget

by Coast News wire services

REGION — The San Vicente Energy Storage Facility received $18 million from the state budget signed this week by Gov. Gavin Newsom, the San Diego County Water Authority announced on Friday.

The money is enough to advance the large-scale renewable energy project through the initial design, environmental reviews and the federal licensing process.

The project is an effort by the city of San Diego and the water authority.

According to the Water Authority, the San Vicente project “is one of the most promising pumped energy storage solutions in California and it would be a major asset to help avoid rolling blackouts through on-demand energy production while helping to meet state climate goals.”

Proponents say the project could mitigate water ratepayer costs across the San Diego region by generating additional revenue to help offset the cost of water purchases, storage and treatment.

When completed, the San Vicente energy project would provide up to 500 megawatts of long-duration stored energy to meet peak electrical demand periods throughout Southern California.

The energy project would create a small upper reservoir above the existing San Vicente Reservoir in Lakeside, along with a tunnel system and an underground powerhouse to connect the two reservoirs.

Its powerhouse would contain four reversible pump turbines, which would pump water to the upper reservoir, where it would act as a battery of stored potential energy.

It would also help meet the goals of Senate Bill 100, which requires 60% renewable energy by 2030 and 100% zero-carbon energy resources statewide by 2045.

According to the water authority, the project would provide enough energy for about 135,000 households once fully operational.

Water authority board Chairman Gary Croucher credited state leaders and agency staff members who have collaborated on the project for years.

Croucher also thanked Newsom and Senate President Pro Tem Toni G. Atkins, D-San Diego, “for ensuring funding for this critical infrastructure project, which will create more than 1,000 construction-related jobs in addition to its other benefits.

The city and the water authority teamed seven years ago to raise the height of the city-owned San Vicente Dam by 117 feet.