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TransAlta explores stake in Alberta pumped hydro development

Blain van Melle, executive vice-president of Alberta business at TransAlta. (Courtesy TransAlta)

TransAlta Corp. is considering a pumped hydro energy storage facility in Alberta's Rocky Mountains that could help alleviate intermittent wind and solar energy as the province moves to more renewable energy sources.

The century-old utility headquartered in Calgary holds energy assets in hydro, wind and solar, and is phasing out coal-fired electricity in favour of natural gas. It has a net-zero goal for 2045 and is amassing a pipeline of renewable projects.

The swell in Alberta’s wind and solar projects comes with potential downsides, namely energy intermittency. However, TransAlta believes it has found a rare opportunity that can help it address the intermittency problem.

Described as a “unicorn” by Blain van Melle, TransAlta’s executive vice-president of Alberta business, the Tent Mountain Renewable Energy Complex features characteristics that do not “really exist in the storage space in any other manner right now.”

These include its unique geology, cost of development and the scale of its potential energy storage.

“We are a believer that storage in various forms, whether that be batteries or other technologies that will be key in managing that intermittent generation from renewables into the future. We saw this as a nice opportunity to get into a project that could help with that,” van Melle told SustainableBiz.

The Tent Mountain project

The site sits on Tent Mountain, which straddles the British Columbia-Alberta border within the Rocky Mountains.

Previously an open pit coal mine shut down in the 1980s, it was reclaimed and purchased by Australian mining company Montem Resources in 2016 with the intent of restarting coal mining. But an Alberta government-ordered moratorium on coal mining on the eastern slopes of the Rockies halted that plan.

Seeking a pivot to renewables, Montem realized the mountain-top site had slowly accumulated a large volume of water. A geological feature of the mountain is a sharp 300-metre drop to the valley floor, allowing for a lower reservoir that effectively seals the complex in a closed loop.

It is also strategically located near substantial renewable energy generation, transmission facilities and lines, and a major highway to facilitate construction. Much of the geotechnical work was already done due to the mine.

These features attracted TransAlta into an agreement to acquire a 50 per cent interest in the project as a lead developer.

van Melle said Montem is in an energy transition of its own, giving both companies a good reason to pursue the project.

How the project works

Pumped hydro energy storage consists of a lower reservoir and an upper reservoir that holds water for use when needed. This project involves building an intake at the upper reservoir and a penstock (pipe) to the lower pool. Water released from the upper reservoir picks up speed as it falls through the penstock and onto a turbine to generate electricity.

Akin to a battery, the upper reservoir can release its contents on demand. Water can be pumped back from the lower reservoir to the upper pool to maintain balance.

“It’s a way to take renewable energy that’s already on the grid or being proposed on the grid, and take that renewable energy that’s intermittent and not necessarily being generated when people want it, store it in the form of water and then release it back to people when they want generation or that renewable electricity,” van Melle said.

TransAlta expects the project to have a 320-megawatt or a 4,800-megawatt-hour capacity. It is equal to 15 hours of energy storage capability for the Alberta market and could power at least 400,000 homes.

The water will cycle through the two reservoirs – it will not be released into watersheds or rivers. van Melle said no additional water will be required, nor will the area require substantial development, minimizing impact on the local environment.

“From an environmental standpoint,” he added, “this project is a huge win,” as it also ends any opportunity for future coal mining on the site.

TransAlta’s interest in the project

TransAlta and Montem will form a partnership and jointly manage the project, with TransAlta as the developer. The acquisition includes land rights, fixed assets and intellectual property associated with the pumped hydro development.

The utility expects three to four years of development with geotechnical work this summer, then engineering and feasibility studies and acquiring environmental impact assessment approval until the final investment decision is made.

TransAlta is seeking off-take agreements to “shore up some of the revenue streams associated with it,” and work with system controllers to see how the project would fit into the grid to meet customer needs for renewable energy. It could be paired with wind projects, for example.

The initial capital estimate is in the $1-billion range if TransAlta proceeds with construction, according to van Melle.

An optimistic timeline is for construction to begin in 2026 and commercial operations to start from 2028 to 2030. These dates are all subject to regulatory, commercial and engineering considerations, the company notes.

Despite large upfront costs that raise criticism about pumped hydro projects, van Melle said it is typical for any power project. But the longevity of pumped hydro outstrips many other types of energy projects.

The Tent Mountain Renewable Energy Complex is expected to have an 80-year useful life, van Melle said, versus a typical wind farm's 30- to 35-year life span before the technology is obsolete.

“You pay a little bit more upfront, but you have something that’s in the ground beyond many of our own lifetimes,” he said.

Editor's note: The project will address energy intermittency, not energy and price intermittency. The timeline of the project was also clarified.

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