The San Diego County Water Authority (SDCWA) announced on July 8 that it is soliciting bids to conduct an economic/financial assessment of a proposed pumped-hydro energy storage (PHES) facility based at the San Vicente reservoir. SDCWA hopes the proposed energy storage facility will be helpful in balancing SDG&E’s power load during peak demand, especially since the San Onofre nuclear power plant is now offline (20% of its output went to SDG&E), and that it would generate extra dollars to boot.

PHES facilities have reversible pump/generators connecting an upper and lower reservoir, with connections to the electrical power grid. The pumps use low-cost electricity during off-peak hours to move water from the lower reservoir to the upper reservoir, creating stored energy. During hours of peak electricity use, water is released from the upper reservoir to generate power at a higher price.

For the proposed PHES facility, the San Vicente reservoir would serve as the lower reservoir and an upper reservoir would be constructed nearby.

The idea isn’t new. Use of the San Vicente reservoir for a PHES project was first contemplated by the City of San Diego in 1993, when it worked with another entity to apply for a preliminary permit for a similar project with the Federal Energy Regulatory Commission (FERC). That permit expired and no extension was requested.

The San Vicente Dam Raise Project shown here nearly completed, increases reservoir capacity from 90,000 to 242,000 acre-feet.

Meanwhile, SDCWA’s massive Emergency Storage Project (ESP) was creating a system of reservoirs, interconnected pipelines, and pumping stations. The Authority imports water from the Colorado River and Northern California waterways in aqueducts that cross three earthquake faults and the flood-prone San Luis Rey River before reaching San Diego County, and a major earthquake or flood could cut the region off from imported water deliveries for between two and six months. The ESP was designed to ensure sufficient local water supplies are available to the San Diego region for up to six months in the event of an interruption in imported water deliveries. Expansion of the San Vicente reservoir and construction of the Olivenhain dam were part of the ESP.

As early as 1996 a PHES facility at Lake Hodges had been identified as complementary to the ESP. In 2000 SDCWA filed with FERC for a preliminary permit and the proposal evolved into the Olivenhain-Hodges Pumped Storage Project, about 15 miles northwest of San Vicente Reservoir. By 2006 late 2000 the Olivenhain dam with a 24,000 acre-feet (AF) reservoir was under construction in an Elfin Forest valley above Lake Hodges, along with a pipeline connecting the two. The PHES facility began operating in the fall of 2011.

In addition to energy storage and new reservoir capacity, the Olivenhain-Hodges connection serves a water resource management function by making it possible to transfer water from Hodges that would otherwise be lost over the Hodges dam spillway during wet seasons if rain runoff exceeds the lake’s capacity. Further, when SDCWA operates the pumps for ‘water purposes’ (i.e., saving water that would otherwise spill from Lake Hodges by pumping it to SDCWA’s aqueduct during a rain event) it pays for the energy at the wholesale rate, not the retail rate.

All of the power generated at Olivenhain-Hodges is sold to SDG&E under a power purchase agreement. The facility operates on a daily schedule, per requests by SDG&E that typically are filed by 2 p.m. for the following day. In general, the project generates power from noon to 4 p.m., while pumping upstream occurs around midnight.

Olivenhain Dam creates a reservoir with 24,000 acre-feet capacity.

As for the cost of energy for pumping versus the money earned from power generation at Olivenhain-Hodges, SDCWA says: “Prices change daily. What’s more important is the delta between the two, which typically is in the range of $5 to $8 per MWh.” SDCWA also receives a “standby” fee of $70 per KW year.

The Olivenhain-Hodges PHES facility has a 40MW capacity, while the proposed San Vicente facility would have a 500MW capacity.

The newer San Vicente PHES proposal took a separate track. In 2006, in cooperation with the City, SDCWA filed an application for a preliminary permit from FERC that was approved in 2007.

After conducting preliminary studies, in 2010 SDCWA issued a Request for Proposal (RFP) for someone to conduct a power market analysis optimization, siting of the upper reservoir, applicable laws, land acquisition, geotechnical, and financial and economic analysis services. For some reason, a contract never materialized from this RFP.

The idea remained alive, however. The 2010 preliminary permit was scheduled to expire on June 30, 2013 so SDCWA applied for a new permit on June 24. As quoted in the July 8, 2013 SDCWA news release announcing the study RFP, Frank Belock, deputy general manager at the Water Authority said: “The concept of pumped storage at San Vicente has been on our radar for years and is a natural next step now that the San Vicente Dam Raise project is almost complete. An independent economic review will help the Board of Directors determine whether we should make it a priority.”

The scope of work in the new 2013 RFP for the $150,000 contract calls for study completion within about six months:

“In general, the scope of work includes technical, financial, and economic evaluation services and includes but is not limited to, identifying project constructability issues and potential risk including potential pipeline or tunnel alignments; approximate intake structure locations and configurations; geotechnical and seismic condition considerations; potential location of powerhouse; facility cost estimate ranges; development schedule; potential impacts to the existing power reservoir; estimate ranges of annual operations; licensing requirements; upper reservoir constraints; environmental permitting process requirements; evaluation of the regional power needs based on existing and planned generation facilities; and an analysis of the power demand.”

In short, the study is largely for return-on-investment and energy market calculations to see if there is a good financial benefit from the PHES facility.

About thirty individuals attended an RFP “pre-proposal” meeting at SDCWA headquarters on July 10 to hear about the project background, scope of work, insurance requirements, etc. Answers to questions revealed that the study project can be managed by a qualified person but technical reports must be signed and stamped by a professional engineer, and that successful bidders on the project will remain eligible to bid on RFPs for further studies (e.g., engineering, geological, environmental) that are possible following completion of this study. Proposals are due July 30.

The RFP identifies four potential sites for a new upper reservoir near San Vicente (SDCWA says it is open to suggestions for other sites):

Alternative Site A (Figure 4) is located near Iron Mountain, approximately three miles northwest of the San Vicente Reservoir. This site’s full pond elevation is approximately 2,110 feet above mean sea level (MSL). The water surface area at full pond is approximately 93 acres.

Alternative Site B is located near Foster Canyon, approximately one-half mile northwest of the San Vicente Reservoir. This site’s upper reservoir’s full pond elevation is approximately 1,490 feet above MSL. The water surface area at full pond is
approximately 100 acres.

Alternative Site C is located approximately 0.8 miles northeast of the San Vicente Reservoir. This site’s full pond elevation is approximately 1,600 feet above MSL. The water surface area at full pond is approximately 60 acres.

Alternative Site D is located approximately 1.8 miles southeast of the San Vicente Reservoir. This site’s full pond elevation is approximately 1,800 feet above MSL. The water surface area at full pond is approximately 80 acres.

The map below shows the possible sites in relation to San Vicente reservoir (click for enlargement). Although SDCWA says it doesn’t have a preference, the location just east of Iron Mountain (Alternative A) might be a favored spot because it has the highest elevation to provide “hydraulic head”.

According to the FERC preliminary permit application, “In a typical year, the Project would likely generate 15-20 percent of the time, usually within relatively short, daily two to four-hour periods. The Project also has the capability to generate continuously at different power levels from 100-500 MW. Assuming Site Alternative A is used as the upper reservoir, if the Project began generating at full load (500 MW) without any weekday pump-back operations, the upper reservoir would contain sufficient storage to provide over 3.5 hours of daily generation between Monday and Friday.”

Depending on the site selected, the upper reservoir capacity would approach 10,000 acre-feet, roughly twice the capacity of Lake Murray.

There may be environmental concerns about a new upper reservoir and no doubt groups like San Diego Coastkeeper, Surfrider San Diego, Equinox Center, and others will provide input when environmental reviews begin. Although he wasn’t prepared to issue a position statement, Coast Law Group co-founder Marco Gonzalez, a long-time advocate for sustainable water policy in San Diego, said “I’m always concerned when someone wants to destroy habitat for a reservoir and dam. However, given the need for cleaner power, the hydroelectric/pump paradigm isn’t so bad.”

The economic outlook for PHES projects is somewhat uncertain, which is why SDCWA wants this financial study.

According to Soma Bhadra, CEO of Proteus Consulting, a consultant who is considering the RFP, “After the evaluation, the chips will fall where they will. I sense that the news will not be in favor of pumped storage. Due to the proliferation of solar and wind in the region, the nature of peak is changing, and the value of peak energy production is decreasing. The energy market for regulation or ancillary services are not yet open in California. There may not be enough off-peak differential to make the numbers work for pumped storage projects, unless we fuel the project with only renewables and take the advantage of some tax credit.”

Unconventional natural gas production may significantly lower natural gas prices for gas-fired power plants (which also can provide quick response power during peak loads, thus competing with PHES), while a legislated price or cap on carbon dioxide emissions could improve the outlook for PHES.

An article in Renewable and Sustainable Energy Reviews states: “”Most low-carbon electricity resources cannot flexibly adjust their output to match fluctuating power demands. For instance, nuclear power plants best operate continuously and their output cannot be ramped up and down quickly. Wind power and solar energy are intermittent and their operators sometimes have no control over the schedule of electricity output. Utility-scale electricity storage to maintain balance and prevent blackouts remains a significant barrier to a de-carbonized power system. There are only two large-scale (>100 MW) technologies available commercially for grid-tied electricity storage, pumped-hydro energy storage (PHES) and compressed air energy storage (CAES). Of the two, PHES is far more widely adopted.”

Still, a PHES facility is not a hydroelectric plant generating new electricity as implied by some media reports. PHES stores energy that was already generated elsewhere but recaptures only 70 or 80% of the power input. In other words, 20-30% energy is lost. Further, as San Diego physicist and fluid dynamicist Dr. Burton Freeman notes, the new reservoir would mean additional water loss from evaporation. Evaporation rates are very difficult to estimate and vary according to the weather, size and depth of reservoir, etc., but water loss can be significant. Freeman also observes that moving water in and out of San Vicente might change the reservoir’s circulation in ways not anticipated by the city’s indirect potable reuse project reservoir limnology study. Plus, unlike the Olivenhain-Hodges facility, it’s not clear if a San Vicente facility would create water resource management benefits (e.g., Olivenhain captures water that could have been lost over the Hodges spillway).

So, as Bhadra said above, “the chips will fall where they will.”

UPDATE July 2021: SDCWA has a new map showing the proposed location of the proposed reservoir at https://www.sdcwa.org/projects/san-vicente-pumping-facilities

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Background material for this story:

Water Authority To Study Viability Of New Hydroelectric Plant / KPBS

Hydroelectric dam may substitute nuke power / U-T San Diego

Water Authority considering hydroelectric power at San Vicente / San Diego Reader

San Diego May Build 500 Megawatt Reservoir Hydroelectric Plant / Bloomberg BusinessWeek

Federal Register, April 15, 2010

Raising San Vicente Dam: Why and How / HydroWorld

Opportunities and barriers to pumped-hydro energy storage in the United States / Renewable and Sustainable Energy Reviews

Thanks to Mike Lee, SDCWA public affairs representative (formerly U-T’s environmental reporter), for obtaining answers to my queries about this project.