Pumped hydro storage is a simple technology already in wide use. Pump water up a hill when you have available energy, let it fall when you need its power.

But Riverbank Power; a new start-up founded by a former wind developer who wants to develop large-scale energy storage, is trying out a new idea. Instead of using hills for the height, it will go the other way. Down into the ground.

Their Aquabank would let gravity drop water underground to turn turbines and make hydro electricity. That electricity would be sent from underground to the grid day time. At night, when excess wind is available; wind powered electricity would gently push the water back up to replenish its surface source.

Each project would use a source of water at ground level, an excavated cavern approximately 2,000 feet below ground and four 250-MW generators in a below-ground powerhouse.

The surface footprint would be only 5 to 10 acres, mainly for the water diversion structure and transmission infrastructure. The underground footprint would be about 100 acres.

It would use about 1 billion gallons of water for six hours of electricity production. It would take eight hours to pump out the cavern. The remaining sixteen hours each day the water supply would not be diverted.

Riverbank already has three sites permitted with FERC under review and fifteen in the works.

This is pretty amazing in itself, for such a new company, and such a novel idea, because FERC is notoriously slow and cumbersome to deal with.

Of the three permits, the first is canceled (in Ogdensburg) because of subsequent irresolvable land permitting issues. The second one in Sparta, New Jersey was for a 1000 megawatt “closed loop” system under a quarry.

Last month they found that the rock was not hard enough to support drilling, to the acute disappointment of locals eager for the jobs (and $5 million annual revenue it would bring in) and the to the relief of a neighboring community with environmental trepidation about the novel procedure.

In thanking mayors of both towns, Riverbank’s CEO Douglas said, “These leaders kept an open mind about the project, understood that scientific testing would guide the development process, and believed us when we said we wouldn’t develop a project that posed a risk to the environment.”

FERC normally grants a preliminary permit to conduct the various studies needed over three years. These cost up to $2 million, and include thorough investigation of the geologic, ecological, engineering, power transmission, economic and environmental impact.

So far, the initial studies for the third FERC permitted site are looking good and will be complete by 2011. It is for a 1,000 MW “river diversion” type of project on the Back River site in Wiscasset, Maine:

Should the results remain positive, this project is expected to take five years after FERC approval, and be complete by mid decade. One plus for the Maine site is that it is already close to the grid - it is sited near a nuclear power plant site decommissioned a decade ago.

More importantly, perhaps; local governments and communities in the Wiscasset area are supportive of renewable energy projects. Maine already boasts by far the most renewable energy of any state - 30%. And that’s not counting an additional 22% of hydro power.

Like conventional hydro power this project involves diverting river water, so fish are obviously an issue:

Riverbank is looking at the best technology to significantly mitigate the impact of the projects on fish and fish habitat. To avoid sucking up fish inadvertently, the initial intake from the river is extremely slow and filtered so that the natural flow of the river remains unaltered, unlike conventional hydro power.

Given that the water is stored underground only for a short time, the pumping does not change the quality or temperature of the water before it is returned to the river.

The financing is unusual for these hard times and decidedly trepid investors:

CEO Douglas is not applying for stimulus funding.

BlackRock Inc, an asset manager with more than $1 trillion under management, is an investor. Each 1,000 megawatt storage facility will cost $2 billion.

Riverbank CEO Douglas said the company has already had a lot of interest in power contracts, and he expects to turn this into power purchase agreements. PPAs could be used to help finance the $2 billion each 1,000 MW project costs.

“We think we can procure unwanted wind energy at night in the off-peak, surplus wind energy, and create a 100% green capacity product to sell the next day,” he said. “In that case, it is 100% renewable, and we will have a renewable energy credit to resell.

It’s not a bad investment. The turbines use no fossil fuels, and each facility should last 100 years.

If each 1,000 MW project produces for 100 years, it should pay for the initial $2 Billion investment many times over, while creating jobs and giving green energy developers a solid market for their power.

Douglas points out:

“Even if we were buying coal at night for our pumping, there’s still a huge carbon win here, because we’re precluding the need for a new fossil peaker plant.”

Source: Go Media - Written by Susan Kraemer - Images from Riverbank and Flikr user ben and Steve Jurvetson