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Utilities See Hydroelectric Potential in Abandoned Mines

Utilities have recently begun eyeing abandoned coal mines in Virginia and elsewhere, but for a different type of energy: hydroelectricity.

(CN) – One of America's largest energy companies sees potential in abandoned mines in Virginia.

In fact, Dominion Energy this week is looking at an abandoned coal mine, the Bullitt Mine, that is filled with water. And that's where the promise may lie: the water.

Renewable energy from wind and solar can supplement America's power needs, but they are not as reliable as hydropower, coal or nuclear. So, American energy companies like Dominion are looking at pumped storage facilities as a more reliable renewable-energy source.

Pumped storage facilities create hydropower by draining reservoirs during high-demand periods into a lower reservoir, creating electricity. The water is then pumped back to the upper reservoir during the night, or when electricity demand is lower and less expensive. The technology acts as a large “battery” to supplement renewable energy such as wind and solar when those sources are not creating enough energy.

The Bullitt Mine in Virginia could act as the lower storage reservoir for a possible pumped storage facility, Dominion Energy’s director of generation construction Spencer Adkins said. The mine, owned by Westmoreland Coal, was closed in the mid-1990s.

Dominion Energy's proposed new pumped storage facility comes as a result of the Virginia Legislature, which in 2017 passed legislation to encourage development of the hydroelectric technology. According to Dominion, the legislation allows a Virginia utility building a pumped storage facility in coalfields to petition the state for recovery of its project costs.

The legislation is important to help companies pursue alternative energy sources in the coalfield region of Virginia, and “it opens the door for companies like Dominion Energy” to develop pumped storage, Adkins said.

Adkins said Dominion will decide in six to eight months which of the sites in Virginia it may pursue – if at all. Meanwhile, the communities are reacting with enthusiasm that abandoned coalfields may one day produce revenue again.

“It's been very positive,” Adkins said. “It's a good economic development for this area.”

The size and cost of Dominion Energy's proposed facility in Virginia have not yet been determined, but planning and construction costs for the pumped storage project are estimated at $2 billion – which they could recover under Virginia legislation that pays utilities to develop old coal mines into hydro facilities.

“That figure is just a ballpark,” Adkins said.

Dominion is looking at two sites in Virginia for pumped storage facilities. On Sept. 6, the utility filed an application with the Federal Energy Regulatory Commission for a potential 4,100-acre pumped storage site in Tazewell County. It also operates the Bath County facility in Virginia, the largest pumped storage power plant in the United States.

Pumped storage has the potential to increase the flexibility and stability of the U.S. electricity grid, as well as support variable renewable resources like wind and solar, according to the Department of Energy. With the capability of powering about 750,000 homes, the Bath County pumped storage hydroelectric facility, when at full capacity, can produce more energy than Hoover Dam, the company said.

There seems to be profit in pumped storage.

The Federal Energy Regulatory Commission has issued a license for a Montana company to build the Gordon Butte pumped storage on private land in central Montana. Since the landowner already has a water right for the streams near Gordon Butte, the owner is able to fill the storage reservoir, draw it down, and sell the power.

According the Gordon Butte FERC application, the facility near Martinsdale, Montana, would cost $173 million to operate in its first year, but could sell its power for $220 million, bringing a gross profit of $47 million in the first year of operation.

The proposed Dominion Energy pumped storage power station in Southwest Virginia would bring approximately $576 million in economic benefits to the Commonwealth, according to the company.

Dominion said the hydroelectric project would support nearly 3,000 Virginia jobs during development and construction, including more than 2,000 in the coalfield region and once it's operating. The power plant could produce about $12 million annually in tax revenue for local governments in Southwest Virginia.

“We are very excited about the prospect of bringing another major capital investment to the coalfield region of Southwest Virginia,” said Mark Mitchell, vice president of generation construction. “The entire grid system will benefit from having this new generation once it comes online, and the local area will benefit from the jobs and economic benefits that will come from it.”

Dominion Energy is also evaluating pumped storage projects in other coalfields in the counties of Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, Wise and the city of Norton.

Pumped storage technology has been around for decades, but is seeing renewed interest. The Federal Energy Regulatory Commission has authorized 24 pumped storage projects already built and in operation, with a total installed capacity of approximately 16,500 megawatts. Most of these projects were authorized more than 30 years ago, commission spokeswoman Celeste Miller said.

Miller said the commission has seen an increase in the number of permit and license applications filed for pumped storage projects, and since 2014 the commission has issued licenses for three new projects in the United States.

The existing U.S. fleet of hydropower plants is aging. As of 2014, the average age of U.S. Army Corps of Engineer hydropower dam facilities was 49 years, and as of 2015, the average age of Bureau of Reclamation hydropower facilities was 58 years, according to the Department of Energy.

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