Is a Dam in Rural Portugal a Key to Our Alternative Energy Future?

When the Portuguese electric power grid needs more electricity, a large multinational power company releases millions of gallons of water from a dammed reservoir.

Jan. 3, 2023

When Portugal’s electrical system needs a boost, a signal activates a power plant buried deep in a hillside in the country’s scrubby, pine-covered north. Inside the man-made cavern, valves, nine feet in diameter, suddenly open, allowing water draining from a reservoir four miles away to begin streaming through four massive turbines.

Up close, the spinning turbines make an earsplitting din. At full power, they generate enough electricity to rival a nuclear reactor.

This is the heart of a vast hydroelectric project that is reshaping a rugged river valley about 65 miles east of Porto, Portugal’s second-largest city after Lisbon. Besides the underground power plant, Iberdrola, the Spanish energy giant, has built three dams in the area — two on the Tâmega River and one on a feeder stream — and the three resulting reservoirs sprawl over nearly four square miles.

“This is my pyramids,” said David Rivera Pantoja, the project manager, who has been working on the project for almost 15 years.

But the 1.5 billion euro ($1.6 billion) complex of concrete, tunnels and water is not just massive. It is also providing an answer to one of the most vexing questions facing renewable energy.

Hundreds of billions of dollars are being spent across the globe on solar energy and wind power. But when the sun goes down, or the breezes become still, where will the electricity come from? Iberdrola’s giant project — which uses water and gravity to generate power on demand, and then pumps the water back to the upper reservoir when rates drop — is part of the solution.

The Daivões dam, top and bottom, is complete, while the Alto Tâmega dam, center, won’t be finished until 2024.

The concept of storing energy in the form of water on top of a mountain has been around for more than a century, but interest waned in the 1990s, when plants burning natural gas became the go-to source for on-call power, shaving the price differences between peak and off-peak power.

Now, however, a kind of global renaissance in the technology, known as pumped storage, is taking place.

What’s changed in countries like Portugal is the rapid growth of clean sources of power like wind and solar farms. While these technologies churn out electric power free of greenhouse gas emissions, they generate an energy stream that is less steady than a traditional power plant fueled by coal, natural gas or a nuclear reaction.

The ongoing shift to renewable power sources and away from fossil fuel plants is creating a need for other sources of electricity that can help bridge the gaps.

“You can’t have just solar and wind,” said Fabian Ronningen, an analyst at Rystad Energy, a consulting firm. “You need something to balance.”

Tapping a reservoir and using its water to spin underground turbines allows engineers to create renewable energy on demand. The rise and fall of the dammed water serve as visible markers of the process taking place.

A facility like this one on Portugal’s Tâmega River stores energy in the form of water when the wind is blowing hard or on sunny days, and then lets it flow, generating electricity and causing the water level in the upper reservoir to fall, when energy is less abundant and more expensive.

It is like a huge battery, but one that produces far more electricity for a longer duration than the large electricity storage facilities used for similar purposes. And reversing the flow of the turbines to pump the water back up the tunnel lets it be recharged endlessly.

Iberdrola executives say plans by governments in Europe and elsewhere to increase wind and solar energy mean more demand for facilities like the one on the Tâmega.

Pumped storage plants can also provide, in essence, energy insurance to install even more sources of clean power generation, aiding the effort to tackle climate change, analysts say. Iberdrola, for instance, plans to install a large wind farm nearby.

Because pumped storage plants are so useful for keeping a power grid humming, they are finding favor in many countries, including China, India and Australia. Several proposals are also making their way to reality in the United States.

But projects this large also bring substantial downsides. In Europe, the scope for building such huge facilities may be limited by high costs, long lead times and opposition from environmentalists and local residents objecting to flooding river valleys. And the flooding from dams can hurt the riverine habitats of fish, birds and plants and inundate antiquities.

In addition, the better sites already have dams on them, so it was quite unusual for such a large complex as the Tâmega to go ahead in a western European country. “This was quite an exceptional project,” said Martin Burdett, news editor of the International Journal on Hydropower and Dams. And the construction work is not yet complete.

For that reason, energy companies may focus on upgrading existing hydroelectric facilities with pumps and other equipment so that they can keep reusing water that is lost when it flows through a conventional hydroelectric dam.

Top, an area of the river valley that has been flooded by the project. Middle, an access road for construction workers. Bottom, workers at the Alto Tâmega dam.

“We will change them into something better suited for the future,” said Ivar Arne Borset, a senior vice president at Statkraft, a Norwegian company that is one of the world’s leading operators of hydropower installations.

Still, as the climate warms, southern European countries like Portugal are becoming increasingly vulnerable to drought, including a brutal one last summer that has reduced Portugal’s hydroelectric output more than 50 percent compared with 2021.

“It is a very expensive way and a very destructive way to produce energy,” said João Joanaz de Melo, an associate professor in the department of environmental science at NOVA University in Lisbon.

Despite this, the Tâmega project won a seal of approval from the European Investment Bank, the lending arm of the European Union, which has provided a €650 million loan.

“The investment provided for this project will reduce the dependence of the Iberian market on fossil energy as well as carbon dioxide emissions,” the European Investment Bank said in an emailed message. The bank also wanted to stimulate the local economy and create jobs.

A Spanish government body, the Instituto de Crédito Oficial, is kicking in another loan for €400 million. Portugal has also promised an annual payment of €12.74 million for 10 years as an investment incentive.

Constructing the Tâmega facility was a long and difficult process involving far more than garnering financial support. Iberdrola won an auction for the site in 2008, paying slightly more than €300 million to use the site for 70 years, and then negotiated compensation for the roughly 50 homes that were to be inundated by the reservoirs. The company agreed to pay €50 million for roads, playgrounds and sports facilities to compensate local governments. And the company has agreed to environmental enhancement projects like tree planting on a comparable expanse of land to what the dams have flooded.

To ensure enough water for the power plant, even during droughts, Iberdrola built two dams on the Tâmega, about six miles apart. These barriers will each have turbines so that they, too, can produce electricity and revenue when water is released.

The company has also dammed a small river that runs into the larger one, creating a third reservoir high on a plateau about 2,000 feet above the valley. A four-mile, 24-foot-wide water tunnel connects this artificial lake to caverns hollowed deep underground where turbines and other equipment are installed.

For most of its length, the tunnel is level, but as it approaches the power plant, it begins dropping and finally plunges vertically, creating tremendous water pressure. If all four turbines are running, the water surges through at 42,000 gallons a second. High above, at the reservoir, the water level slowly seeps lower. An hour’s release draws down the level of the upper reservoir, which is about 100 feet deep when full, about two feet.

Construction continues at the facility.One of the dams, the Alto Tâmega, will not be completed until 2024.

The underground power plant, though, is already operating. There, a team of technicians work in a subterranean world. This facility has started to produce electricity while still undergoing final adjustments.

So far, as a system that can reuse water, it is proving more resilient at a time of drought than conventional dams. Mr. Rivera says the facility ran almost flat-out in the fall, releasing water when electric prices were elevated and sending it back when they dropped. The same water went “up and down, up and down” all day, he said.

Iberdrola says that last summer’s severe drought and low water levels at traditional dams increased the use of the storage system. The company also says that periods of both high and low electrical generation from wind and solar should increase demand to tap into the reservoir. The more frequently the turbines are used, the more revenue they will produce for Iberdrola, executives say.

The power plant is installed in a vast cavernous space. Technicians in yellow vests and hard hats are sometimes present to perform maintenance but aren’t required at all times. The turbines are switched on and off from Madrid, where Iberdrola is based.

And so after 15 years, Mr. Rivera has almost completed his monument. While countries like Portugal may be running out of places to build conventional dams, water is such a useful medium for storing electricity that it seems almost inevitable that more of these centers will be built.

But in the future there may not be many more projects in Europe as huge as this one. Innovations are likely to reduce water loss and make the facilities less destructive to the environment. Mr. Burdett, of the International Journal on Hydropower and Dams, said existing hydroelectric plants would be modernized to conserve water. He added that depleted mine shafts and excavations near the sea were all being considered as alternatives to damming up rivers.

Top, The room containing part of the control panels for monitoring the flows of electric power. Center, the tops of the four turbines are shown in the power plant floor. Bottom, cables carrying electricity flank a walkway.