SMUD Cancels New Pumped-Storage Generation for Other Renewables

SMUD cancels $1.45 billion hydro project

Utility cites rising costs, new power technologies

Estimates rose from about $800 million to $1.45 billion

SMUD says it’s working on other power-generating options

Sacramento Bee 2-6-16


   The Sacramento Municipal Utility District has canceled plans to build a $1.45 billion hydroelectric project at Iowa Hill in El Dorado County, citing high costs and the potential to obtain power more economically from other sources.

   SMUD’s board of directors voted unanimously Thursday night to abandon the project. The utility said the project had exceeded costs estimates, and there was “a predetermined cost-based off ramp.” SMUD also said the high cost of the project presented financial risks. 


Example of pumped-storage at PG&E’s Helms plant between Wishon and Courtwright Lakes on the west slope of California’s High Sierra.

   Iowa Hill was to be a 400-megawatt, pumped-storage hydroelectric project, utilizing various power sources to perpetually pump water to generate electric power, as opposed to a system where gravity pushes water to a turbine. The project was to have been built along the Upper American River Project at Slab Creek Reservoir.

   The utility said its engineering contractor last year provided a construction cost estimate of $1.45 billion. An investment of that size, SMUD said, would limit choices the utility has to pursue other power-generation technologies. Previous cost estimates were in the range of $800 million to $1 billion.

   In 2015, SMUD said it reevaluated the need for energy storage that would have been provided by the Iowa Hill project, determining that less than half of its capacity would be needed prior to 2030.

   Scott Flake, project director for Iowa Hill, said the proposal dates back to 2001, “and there have been a lot of changes since then. … The price of solar has dropped dramatically. There are a lot more alternatives now.”

   SMUD said the electric utility business is moving away from large, central power plants in favor of a wider distribution of energy resources, including battery storage and solar installations . The utility said other options include compressed-air energy storage, microgrids and small, flexible generating units fueled by natural gas. SMUD said technology for storing electricity in lithium-ion batteries “has advanced at a surprising rate recently and could become economical on a larger scale in the next decade.”

   SMUD said electric vehicles also could play a role in meeting future energy storage needs. The idea – promoted by Gov. Jerry Brown – is to have utilities pay electric car owners to store power in their parked vehicles that could be sent into power grid when it’s needed.

   The utility said it’s also working with the Western Area Power Administration to study the feasibility of adding a new transmission line in the Sacramento Valley. That could provide a similar boost in SMUD’s capability to serve peak load and access to more clean renewable energy resources from the Pacific Northwest. SMUD said the Colusa-Sutter Transmission Line project would help SMUD meet goals to integrate larger supplies of intermittent renewable energy at a projected cost of about $240 million.

   SMUD said it will determine this summer whether to build a new, small powerhouse below Slab Creek Dam, independent of Iowa Hill. The utility said its decision to cancel the Iowa Hill project will not affect planned upgrades to the Slab Creek Dam and improvements to recreational attractions.

CaliforniaGeo Responds—

The technology of pumped hydroelectric storage has been around for some time, working with a renewable resource (water) to generate extra capacity during peak electrical loads on the grid. 

Off-peak electricity is used to pump water from a lower reservoir to fill one at a higher elevation with turbines that can reverse themselves as pumps to reverse the flow of water.  During the grid’s peak load, the upper reservoir allows outflow to be accelerated by gravity to generate electricity that was stored as potential energy (in addition to turbines flowing out of the lower reservoir).

SMUD has decided that the price tag for building the Iowa Hill plant’s 400 megawatts was not worth the cost in comparison to other renewable and distributed generation that can be obtained.  And in California’s “new normal” drought situation, staying clear of more rainfall dependent hydro might be a good thing.

Alleghany River 450 MW pumped storage facility.

Alleghany River 450 MW pumped-storage facility.

Finally, if this utility wanted to shave their grid peak in a hot/dry climate, they couldn’t do better than to deploy geo heat pumps (GHPs) in retrofits and new construction.  Compared to standard air conditioning or air-source heat pumps in the cooling mode,  GHPs can save 2.5 KW against the average home’s cooling because of their efficiency, and the thermal leverage they get from sending unwanted heat into underground dirt at average temperatures of 70-75° instead of hot afternoon air.

SMUD and similar utilities could embark on a program of drilling geothermal boreholes for customers’ GHP retrofit projects and shave large slices of their former summer grid peaks.  They could also improve their load factor in winter.  

—Bill Martin