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Proposed pumped storage project aims to add reliability to electrical grid

Proposed pumped storage project aims to add reliability to electrical grid

In Greek mythology, Sisyphus spent eternity locked in an endless cycle of toil. Each time he lugged a huge rock up a hill, he lost control, the rock rolled back down and Sisyphus had to start all over.

Within a few years, about 4,000 acre feet of water that’s essential to a proposed $900 million pumped-storage hydroelectric project will flow in a Sisyphean loop, continually rising and falling between two reservoirs separated by about 1,000 feet of elevation.

Developers say there’s a simple way to describe the Gordon Butte pumped storage project being developed near Martinsdale by Absaroka Energy LLC. The system will act as a huge battery capable of both storing energy and generating electricity. The plant is designed to balance demand for electricity on a broad and increasingly complex electrical grid.

"It’s also tracking the grid, second to second, making sure it’s smoothing out the variability. It's a reliability and safety issue," said Carl Borgquist, president of Absaroka Energy LLC, the developer of Gordon Butte.

Absaroka Energy submitted its license application to the Federal Energy Regulatory Commission, a federal agency that oversees the nation’s interstate transmission and pricing of a variety of energy resources, late in 2015. Borgquist estimates that the FERC license could be approved by the end of this year. Construction is tentatively scheduled to begin in late 2017.

Gordon Butte, likely one of the largest civil projects ever built in Montana, could come on line by the end of the decade, Borgquist said.

Montana is known for its wealth of hydroelectric generating capacity. Northwestern Energy operates 11 dams, and about 37 percent of the electricity generated in Montana comes from hydro power, according to the Energy Information Administration. But Gordon Butte will be a little different.

Although Gordon Butte will be Montana’s first pumped-storage project, the concept isn’t new. Numerous pumped-storage facilities are in use throughout the country and in Europe, Borgquist said.

A couple features distinguish the Gordon Butte project. For starters, it’s a closed-loop system in which water circulates between two reservoirs but isn’t discharged into a watershed. 

Secondly, Gordon Butte is engineered to provide “ancillary and balancing capabilities” to the electrical grid, rather than acting as a source of electrical generation that’s tied to a dammed river. Gordon Butte is located on private land. The project has a water right. But because it's a closed-loop system, it doesn't affect other users.

Here’s an example of how the Gordon Butte project would operate. Late at night, a utility’s hydroelectric plants generate electricity but there might not be a place for that power to be used on the grid because people are asleep and aren’t using their TVs, computers and appliances. That excess power can be sent to Gordon Butte, where the energy is used to pump water from the lower reservoir to the upper reservoir.

But as people flick on their microwaves and toasters in the morning, demand for electricity spikes. In response, water at Gordon Butte rushes down a penstock, spins electrical generators, and electricity flows into the grid, meeting the demand.

The electrical grid requires constant monitoring as electrical supply and demand fluctuate according to weather, the time of day and whether power sources are generating.

“Pumped storage is considered one of the cheapest, most reliable and robust regulation and capacity you can buy in the world,” Borgquist said. “The trick is the sites are hard to identify and develop. You have to have the right cocktail of ingredients to make it work.”

The project is being developed at a time when the nation’s electrical industry is undergoing significant changes. While coal-fired electrical power is in decline, natural gas and renewable energy are gaining a larger share of the nation’s electrical generation portfolio.

Wind and solar are expected to add a combined 16.8 gigawatts of electrical generation capacity to the nation’s electrical grid this year, while natural gas generation will add an addition 8 gigawatts, according to the Energy Information Administration.

But one distinguishing feature of solar power and wind energy is that they’re intermittent. The wind doesn’t always blow, and solar panels don’t generate power at night.

Given the changes taking place, Gordon Butte has the potential to play an important role in future energy markets, Borgquist said.

He said Gordon Butte can be a service provider for a number of customers, known as “offtakers.” Any utility that is connected to the Montana grid or the Colstrip Transmission System would be a target customer, Borgquist said, mentioning Northwestern, Puget Sound Energy, Portland Central, Avista and PacificCorp as potential customers.

In July, the owners of Colstrip units 1 and 2 announced that the 1970s-era plants would be shut down by 2022. Borgquist said it might make sense for Puget Sound Energy, one of the co-owners in the two Colstrip units, to maintain a presence in Montana, utilize the Colstrip Transmission System and obtain wind energy from Montana.

“Gordon Butte can provide enhanced integration of the wind and provide Puget with a dispatchable green energy source,” he said.

Butch Larcombe, a spokesman for Northwestern Energy, said Northwestern officials have met with Gordon Butte’s developers several times. At this point, it doesn’t appear that Northwestern is interested in investing in the project.

“To invest, we would need to be confident that the project could help us meet our energy needs in an economic fashion and the electricity produced would win (Montana Public Service Commission) approval for serving our montana customers,” Larcombe said. “When it comes to being a potential customer, NorthWestern typically seeks competitive bids from potential suppliers when it sees a need for additional electricity.”

Sharing information with potential customers is another focus.

“We have been keeping a number of potential customers/owners fully updated as the project has moved forward,” Borgquist  said. “We have been active in resource planning activities with utilities throughout the region. We have also been in early discussions with financing parties to test the waters and start the beauty contest to determine who might take a lead role in the financial packaging of the project. “

Likewise, the company is keeping the Montana Public Service Commission apprised of the project’s progress.

Gordon Butte has worked diligently to keep the Montana PSC informed of our progress.  In the likely event that we can benefit Montana and Montana ratepayers with Northwestern Energy as a partner, then the PSC will be involved – as they were with the David Gates Generating Station – DGGS,”  Borgquist said.


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