Adam Rousselle, a Bucks County entrepreneur, imagines that one day this 40-acre public nuisance will once again deliver energy – not by producing coal, but as a massive energy-storage device to hold renewable power generated from nearby wind farms.
Rousselle’s company, Merchant Hydro Developers LLC, last month received a preliminary federal permit to study converting the Shen Penn pit into a pumped-storage hydroelectric project. In pumped-storage systems, power is generated by releasing water from an upper reservoir when electricity is needed most. At night, when excess power is available, the units are reversed and water is pumped uphill to refill the upper reservoir.
“It’s like a giant liquid battery,” said Rousselle, 51, an executive in electric-transmission ventures who lives near Doylestown.
The Shenandoah proposal is the largest of 21 pumped-storage projects for which Merchant Hydro has filed applications with the Federal Energy Regulatory Commission. Most are in Pennsylvania, and many are situated on old strip mines or near wind farms.
One of them would be located in Bucks County, in Nockamixon Township — and not on an old mine, but on public lands owned by the Pennsylvania Game Commission.
“We’re only going to do these if they are economically viable, environmentally viable, and socially viable,” Rousselle said.
Pumped storage is not a new concept. The U.S. Department of Energy counts 42 existing pumped-storage plants, most built decades ago, that can deliver 21,600 megawatts of power, about one-fifth of the nation’s hydroelectric capacity. Exelon Generation of Kennett Square operates one site, the 1,070-MW Muddy Run Pumped Storage Facility, which opened in 1966 along the Susquehanna River in Lancaster County.
With the growth of intermittent renewable wind and solar energy, there is a growing interest from grid operators in devices that can maintain the power system’s reliability by storing energy for use when the sun is not shining and the winds are not blowing.
Though new energy-storage technology like flywheels and battery arrays have captured the public imagination, the Energy Department says pumped-storage projects still account for 97 percent of the nation’s utility-scale power-storage devices.
“Pumped storage is one of the backbones for integrating all this new generation,” said Jeff Leahey, deputy executive director of the National Hydropower Association.
Though pumped-storage facilities consume more power than they produce, they make money off the difference in the wholesale price of electricity: Power is cheap at night, when the pumps are filling the reservoir, and can be very expensive during peak hours, when the power is sold into the grid. Some new hydro turbines also can earn fees helping grid operators such as PJM Interconnection Inc. keep the grid’s voltage in balance.
But getting regulatory approval for a pumped-storage facility from a multitude of federal and state agencies is laborious, said Leahey. Investors are reluctant to back projects with long-term, uncertain horizons.
“If everything goes right, you’re looking at a five- to six-year process,” he said.
The Federal Energy Regulatory Commission has approved only two pumped-storage facilities in recent years, including the 1,300-MW Eagle Crest plant on abandoned iron mines near Joshua Tree National Park in Southern California. FERC approved that project in 2014 after a six-year review, and Eagle Crest is still lining up permits before it can break ground.
If ushering a single pumped-storage project through the regulatory process is daunting, Rousselle has his hands full with 21 of them, including one in New Jersey, one in New York and two in Maryland. FERC has granted preliminary permits to seven, which gives Rousselle exclusive rights for three years to conduct studies and to apply for a formal permit.
He offered no cost estimates, but the developers of a 400-MW facility approved in December in Montana that’s about the size of the Shenandoah project say it will cost $1 billion to build. In a 2016 report, the Energy Department said pumped-storage projects cost upward of $2,500 per kilowatt to develop, which would place the price for all of Merchant Hydro’s 21 projects north of $6 billion.
To back his venture, Rousselle will need to enlist bigger players with deep pockets. “We think there’s a lot of value in our vision of a distributed pumped hydro fleet, and we think building them in succession will reduce costs,” he said.
The Shenandoah project, at 405 megawatts, is the largest facility in Merchant Hydro’s portfolio, and one of the more promising. In Rousselle’s plan, the Shen Penn mine pit would function as the lower reservoir. The upper reservoir would be built on nearby Locust Ridge, where Avangrid Renewables operates two wind farms with 64 towering turbines.
The firm’s application calls for building up to two reservoirs on the ridge, 560 feet above the lower reservoir, connected by three 48-inch-diameter pipes.
The upper property is owned by the estate of Stephen Girard, the Philadelphia trust that funds Girard College and also has substantial property interests in the coal region. Rousselle said he has an option to develop the land.
He identified potential sites by running topographical information through a computer to search for mountainous terrain that had at least 500 feet of steep elevation change, to generate a tremendous force from water released from the upper reservoir.
Unlike most established pumped-storage facilities, which draw from open bodies of water such as rivers, Merchant Hydro aims to build closed-loop systems that have dedicated lower reservoirs.
The exception is the Nockamixon project in Bucks County, where Merchant Hydro proposes to draw water from the Delaware River canal near Kintersville and pump it into a 150-acre upper reservoir on State Game Lands No. 56.
Maya K. van Rossum, head of the Delaware Riverkeeper Network, said her organization plans to intervene to oppose the project. She said that Merchant Hydro’s river intakes could cause harm to aquatic life, and that the destruction of forested game lands “is really a taking of public land.”
“People say, `We’re going to do clean energy,’ because that’s the word of the day. But there are clean-energy options that don’t have this kind of heavy footprint,” she said.
The Nockamixon project is one of three that target state game lands. Others in Tioga County and near Carbondale also have generated opposition filings from nearby residents.
Rousselle is joined in the project by his son, Adam Rousselle II, a senior studying finance at the University of Tampa, whom he credits with inspiring the venture. The younger Rousselle, 21, has already acquired some experience in energy matters. For a senior project at New Hope-Solebury High School, he said, he read a thousand pages of PJM manuals to learn more about energy-market rules.
In 2015, he applied for three FERC permits to build small-scale hydro projects at existing dams, including one at Blue Marsh Lake in Berks County that generated substantial opposition from environmentalists and public water officials, and one at Nockamixon State Park in Bucks County.
The younger Rousselle stopped filing required project updates, and FERC subsequently withdrew the permits.
“Now we’ve applied for a huge number of projects,” he said. “Our interest has evolved from existing dams to pumped-storage hydro.”
His father said the projects will bring jobs and economic activity to depressed parts of the state. “I completely acknowledge we won’t build all of them,” he said, “but the only way you learn is if you try.”
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