This Kentucky coal mine could transform into pumped-hydro grid storage

The vision of converting coal country into a clean energy powerhouse looms large in the American energy transition. Politicians love to tout the possibility, and climate advocates see it as crucial for a just transition that avoids leaving populations behind as coal power fades away. But finding the right form of clean energy to achieve this is harder in practice — putting some solar panels over a coal mine doesn’t replicate the economic engine that once existed there.

A company called Rye Development thinks the way to go is constructing pumped-hydro energy storage on old coal mining sites, turning them into resources that help stabilize the grid for decades to come. Last week, the Department of Energy selected Rye to receive $81 million to develop one of these projects in the southeastern corner of Kentucky, on land that has hosted mining for at least 70 years. The Lewis Ridge project would deliver up to 287 megawatts of power for up to 8 hours, giving it more storage in the tank than the biggest lithium battery plants built thus far.

Rye believes pumped hydro can solve two problems at once: ensuring grid reliability in the face of extreme weather events and closures of coal and gas plants, and rejuvenating hard-working communities that have lost jobs and a local tax base after toiling for decades to supply America’s energy needs. The current project, in Kentucky’s Bell County, would create 1,500 family-wage construction jobs and could operate for as long as a century.

“This helps build resilience in the grid and resilience in those local communities, which is a great outcome,” said Rye Development CEO Paul Jacob. ​“When I put on my developer hat, I want to build in the place where people like it, and this is a great example of that.”

Developing on historic mining sites comes with challenges: First, Rye needs to map out the spots where the mining actually took place — sometimes decades ago — so it can ensure structural stability for the two artificial reservoirs it will construct across 500 feet of elevation gain. The $81 million from the Department of Energy — one of five recent award selections aimed at transitioning coal communities to clean energy — will support de-risking the geological issues and proving that the project will be structurally sound. The full project will ultimately cost $1.5 billion or more to build.

Rye initiated the licensing process with the Federal Energy Regulatory Commission in 2021. If the early investigations work out well, Rye could start construction in 2027 and finish the project four or five years later, which would still make this the first new pumped-storage plant in the U.S. in decades. And if this project successfully proves that legacy coal mines can support large-scale grid storage, Rye wants to develop many more like it.

Pumped hydro is an old technology that remains the workhorse for energy storage in the electrical grid, despite all the lithium-ion batteries flooding onto the system in recent years. Excess electricity pumps water uphill from a lower elevation reservoir to a higher one, where it is stored until operators release it back downhill to generate electricity. These facilities are expensive to build and take years to develop; once completed, though, they store energy for far longer than lithium-ion batteries do cost-effectively, and they last for many decades with minimal deterioration.

Rye has been trying to build new pumped hydro out West, where the landscape is wide open and the mountains are taller. But the company recognizes that the Eastern U.S. has many tracts of mountainous terrain previously used for coal mining, Jacob said. The substantial changes to the land make it hard to do much after the mining closes down.

“It’s not a safe place to go hiking, it’s not a place to go golfing, you can’t farm it — really the only thing you could do is use it for timber every 20 years,” Jacob said. Pumped hydro ​“is a way to use it for something that is helpful and creates a lot of jobs.”

Lithium-ion battery storage has grown tremendously in the last five years. But much of the economic benefits from those projects accrue to the factory where the batteries are produced; installation is relatively quick, and ongoing operations require little hands-on attention. These qualities make batteries highly attractive as a power plant investment, but less compelling as an economic replacement for the outgoing coal industry.

In contrast, pumped hydro involves years of earth-moving and heavy construction that has to be done on-site.

“We’ve got to build two lakes and connect them,” Jacob said. ​“It’s local work that isn’t dissimilar to a lot of mining activity.”

After ensuring construction can proceed, Rye needs to find a customer. The project can connect to the regional PJM grid, as well as to the systems managed by local utility LG&E and KU Energy. The goal is to find a utility to contract for the plant’s services or buy it outright, Jacob said.

“To operate this on a merchant basis would be a neat idea, but practically speaking, this really needs to be contracted and managed by somebody who has responsibility for keeping the lights on,” he explained. ​“The real value is in the whole package of things that it can provide.”

In the near term, that includes meeting peak demand and maintaining grid quality during disruptions. Pumped storage offers grid services that are otherwise served by gas plants, freeing those plants to run at optimal efficiency. As more renewables get installed in the region, pumped storage can shift that power to the most valuable times of day. Pumped hydro is thus capable of solving near-term power needs while staying useful as the grid transitions to higher renewable production.