San Diego looks for partner to build $1.5B San Vicente hydro energy project

The Water Authority and the city hope to have the energy storage facility operational by 2030.

By Rob Nikolewski – Sept. 21, 2021 3:08 PM PT

The project is on the drawing board. Now the San Diego County Water Authority and the city of San Diego are looking for a private partner to build and operate a pumped energy storage facility at the San Vicente Reservoir.

The Water Authority and the city have issued a request for proposal to find a suitable team to develop one of the state’s largest “pumped hydro” projects that would add megawattage and flexibility to California’s electric grid. Proposals from potential partners will remain open until Nov. 3.

“We are committed to finding a private partner who can help move this from concept to completion,” Gary Bosquet, the Water Authority’s director of engineering said in a statement.

The construction and development of the San Vicente Energy Storage Facility is estimated to come to $1.5 billion. Prospective bidders must provide details of the work required and lay out a financial plan.

The long-discussed project would see the construction of an upper reservoir of about 8,000 acre-feet of water to complement the already existing 247,000 acre-feet San Vicente Reservoir, nestled in the Cuyamaca Mountains near Lakeside.

The two reservoirs would be connected by a tunnel system and an underground powerhouse containing four reversible pump turbines.

The project would pump water from the lower reservoir and send it to the upper reservoir. The stored water would later be released and the ensuing rush of water would generate electricity.

Pumped hydro projects have been part of the nation’s energy grid for more than 100 years but they have taken on a larger role in recent years as states and municipalities look to drastically reduce greenhouse gas emissions. By 2045, California looks to derive 100 percent of its electricity from carbon-free energy sources.

In July, the state budget earmarked $18 million for the facility to advance it through the often time-consuming initial design, environmental reviews and the federal licensing process.

The Water Authority and the city hope to have the project up and running by 2030. The facility will not interfere with existing water supplies, water quality, fisheries or recreational activities at San Vicente.

The project is designed to provide about 500 megawatts of long-duration energy storage — eight hours or 4,000 megawatt-hours per day, enough to power about 135,000 households.

Renewable energy, in particular solar, is so abundant during California’s daytime hours that it is commonly curtailed and sometimes the excess is sent to neighboring states. The plan for the San Vicente project is to take the electricity otherwise curtailed during the day and use it to pump the water to the upper reservoir.

Then during the 4 p.m. to 9 p.m. hours when solar production ebbs as the sun goes down and the state’s grid is often under duress, the water can be released to generate electricity when the system needs it most.

The California Public Utilities Commission last year called for adding about 1,000 megawatts of pumped storage to the state’s grid by 2026.

Water authority officials say adding the project to the grid will help lessen the effects of rotating outages — experienced statewide in August 2020 — and reduce the number of Flex Alerts, in which the state’s grid operator calls on consumers to voluntarily conserve energy during times of peak energy demand and tight energy supplies.

“The bigger message for everybody in San Diego and across the state is that this facility is providing grid reliability, which is what we need as we continue to meet the state’s fairly aggressive goals for carbon-free energy,” said Neena Kuzmich, the Water Authority’s deputy director of engineering. “We need this type of facility to be able to do that.”

The San Vicente Energy Storage Project will not affect water rates, Water Authority officials said, but the costs to build and operate the project will be integrated into electricity rates. How much electricity rates will be affected is not yet known because the finances from the prospective winning bid are still to be determined.

But Kuzmich said electricity rates will not be impacted until the project begins operating.

“If we don’t implement these types of energy storage facilities, it’s going to actually cost us more money in the long run to meet our clean energy goals because we’ll have to get power from outside the state during that 4 p.m. to 9 p.m. (time frame) when everybody’s coming home, using more energy and the renewables aren’t available to use,” Kuzmich said.

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 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 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.