Snowy Hydro boss Paul Broad has been out and about talking up the merits of pumped hydro over chemical battery storage such as the much touted Tesla installation in South Australia. According to AFR, Snowy Hydro has been crunching the numbers and reveals that the cost of Snowy 2.0 and transmission lines would add $127 per year to the average household electricity bill by 2027. Snowy Hydro says that providing the same storage using batteries would add a staggering $4000.00 per year to the average bill.
Its hard to believe that such numbers could be true.
The shear magnitude of the snowy 2.0 project gives some credibility to the notion that pumped hydro could be cheaper for large storage. A characteristic of pumped hydro is that the magnitude of energy stored is related to the water volume, and for a given power station size, the water volume can often be increased at low marginal cost, and so per megawatt-hour the cost can fall dramatically. In the case of the Cultana project costed at about 1/3 the cost of equivalent batteries for the same energy storage, the storage component could be increased by increasing the size of the upper turkeys nest dam. The dam cost portion of the project is quite low at less than 10% of project cost. This chart taken from the Cultana Knowledge Sharing Report shows that increasing hours of storage has a low impact on overall project cost and shows significant reduction in cost per unit of storage.
In the case of the Snowy Hydro project, because the dams to be used, Talbingo and Tantangara, are both existing the storage element of the project is already provided, and the costs will vary with the nameplate capacity of the project. And because the dams can store an enormous amount of energy, the per unit costs is expected to be quite low.
Snowy Hydro is not releasing much detail about the project, but based on rudimentary information about the elevation difference between the two dams and a generating efficiency of around 85% the energy storage potential can be estimated. Tantangara stores 254 gigalitres which is 87 times larger than the Cultana project. Talbingo stores 920 megalitres of water and is about 600m below Tantanagara — this 600m of head is more than double that available at Cultana. Assuming that only half the capacity of the smaller of the two dams is available for the pumped hydro operation, that is about 43 times more volume and double the head for about 80 times the energy available at Cultana. Cultana stores about 1.7 gigawatt-hours of energy, and that would suggest Snowy 2.0 can store about 136 gigawatt hours of energy.
Compare this to the entire world’s production of lithium batteries of about 35 gigawatt-hours per annum — this would mean that to provide the same storage capacity in lithium batteries would require the next 4 years world production of lithium batteries to be dedicated solely to this project (or assuming Tesla’s new battery gigifactory does come on line fully by next year, it may mean about three year’s production.) Its clearly not credible that batteries could offer a high penetration of grid scale storage any time soon and gives credence to the idea that large scale storage is better provided by pumped hydro than batteries.
The idea that batteries could ever add $4000 to the average electricity bill though is quite bizarre. For small scale storage batteries have a clear advantage and can be deployed very quickly. When used behind the meter they are already economical and any tendency for power prices to rise will encourage the use of storage in this manner, and so the possibility of prices rising to the stratospheric levels suggested by Broad is implausible.
You can read the full Snowy Hydro story in AFR here.