San Miguel to build a P26 billion hydropower facility in Aklan
The facility is being built by Strategic Power Development Corp., a subsidiary of SMC Global Power Holdings Corp., which is itself a subsidiary of San Miguel [SMC 116.70 1.10%].
The P26.3 billion facility will be capable of generating 300 MW of electricity, and is meant to assist the Visayas grid during peak hours. Once construction is given the final go-ahead, it will take about 55 months to complete.
SMC is hoping to have completed construction in late 2025, with operations starting in 2026. SMC has referred to the project as a provider of “renewable energy”, and has touted its importance to the area as a means of increasing the energy security of the region.
MB BOTTOM-LINE
Pumped storage facilities are controversial (but useful) components of a power grid that serve the purpose of being a battery that the grid may call on in times of strain. To be clear, pumped storage facilities are not like normal dams that collect the natural flow of a river and release that flow over turbines to generate vast amounts of reliable electricity. Instead, pumped storage facilities are basically like electricity price arbitration tools that allow the operator to buy cheap electricity from the grid in times of oversupply, use that electricity to pump water up a hill, and then let that water flow down over turbines at some time in the future when the price of electricity is higher.
The operator sells the expensive electricity back to the grid, and nets the difference. The catch here is that pumped storage facilities are only 70-80% efficient, which means that they technically consume more energy than they produce. Pumped storage facilities are also not self-sustaining, which means that they need to be powered by some other source (from the grid), and since they use cheap power to pump the water up, that means they’re doing the pumping at night during the off-peak hours when coal and geothermal power plants are still producing.
So, depending on the source, it’s possible for pumped storage to be doubly non-renewable: using 10,000 megawatt-hours of cheap coal-fired electricity during the night to recover and sell 75,000 megawatt-hours of higher-priced “pumped storage” electricity during the day. That’s the worst-case scenario, though. Ideally, pumped storage facilities are an excellent addition to a grid that produces excess renewable wind and geothermal energy at night.
Unless somehow stored, all electricity must be used when it is made. Pumped storage gives us a way to store electricity, but, again, that storage is only as “green” as the power used to get the water up the hill in the first place!
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