Municipal Water Leader
Interview

Implementing Oceanus’s Pumped Storage- Desal Plant in Chile

Desalination plants typically deal with two major problems: the desalination process requires a large amount of energy, and it results in a large amount of brine, which is difficult to dispose of safely. Oceanus Power & Water has come up with an innovative solution to this problem: combining a pumped storage facility, which stores power in the form of elevated water that can be used to drive turbines, with a desalination facility. Gravity power alone can dramatically reduce the energy demands of the desalination process, while the resulting brine can be reinjected into the stored seawater as it is released back into the ocean, diluting it on site. Chile, a country that has been suffering from decades of drought and which is also moving forward with an ambitious decarbonization plan, has turned out to be a prime location for Oceanus’s technology. 

In this interview, Joan Leal, the chief development officer of Oceanus Power & Water and the president of its South American subsidiary Oceanus Energía y Agua de Sudamérica, tells Municipal Water Leader about the benefits of Oceanus’s solution and why it is such a good fit for Chile. 

The benefits of Oceanus’s IPHROCES system.

Municipal Water Leader: Tell us about your background and how you came to be in your current position. 

Joan Leal: Working in engineering and management consultancy for many years in several emerging economies gave me a chance to see how important infrastructure and energy developments can be for society when the primary focus is on serving people’s needs through sustainable and innovative solutions. Looking for the right integration between society and infrastructure, I went to Stanford University to immerse myself in an innovative and entrepreneurial environment. My time in Silicon Valley took me to the roots of the world’s energy and water challenges, giving me a deep understanding of the nexus of infrastructure, energy, water, and technology. 

My journey in the infrastructure and energy sectors and my passion to make a difference in society led me to become an entrepreneur. I joined Oceanus Power & Water and developed an integrated, global, and sustainable solution capable of addressing the major challenges of the world today—fresh water supply and clean energy storage. As chief development officer, I’ve led the development of an integrated energy storage and water production solution, filed several patents, built relationships with power and water utilities, negotiated offtake agreements and term sheets, raised capital, led project development, and participated in the definition of regulatory frameworks in different regions. 

I hold a bachelor of science and master of engineering in civil engineering from universities in Chile, and I am a graduate of Stanford University’s Graduate School of Business. 

Municipal Water Leader: Tell us about Oceanus and its history. 

Joan Leal: Oceanus Power & Water is an infrastructure development company focusing on delivering new water, carbon-free energy, and energy security. The company was first envisioned in 2014, inspired by the challenge of delivering cost-effective energy storage to help manage the growing supply of solar energy in California. In 2015, Oceanus Power & Water was formed to pursue the development of a new kind of large-scale pumped hydro storage facilities. In April 2016, it completed a desktop study evaluating the integration of seawater pumped hydropower energy storage and seawater reverse osmosis (RO) desalination into a single facility. The study found that the integration and colocation of these existing, bankable technologies would have significant economic and environmental benefits. The resulting idea was named the Integrated Pumped Hydroelectric Reverse Osmosis Clean Energy System (IPHROCES). In 2016, Oceanus launched Oceanus Agua y Energía México, its first subsidiary, and started looking for project opportunities in Mexico. In 2017, Oceanus launched its first project in the Mexican state of Sonora. In 2018, Oceanus launched its South American subsidiary, Oceanus Agua y Energía de Sudamérica, in Chile; I took the role of president. 

In 2018–2019, Oceanus completed conceptual engineering studies for the sites in Mexico and Chile, concluding that the selected sites are viable locations for the IPHROCES technology. In addition, Oceanus has identified several locations in the United States to implement IPHROCES, including sites in Southern California, Puerto Rico, and Hawaii. The facilities are appropriate for any location where a large population resides in a semi-arid coastal area. 

Municipal Water Leader: Please describe IPHROCES and how it differs from existing installations. 

Joan Leal: The Oceanus IPHROCES solution combines seawater pumped storage with seawater RO to create a single, integrated water-production and energy-storage system. IPHROCES has a seawater-intake facility located on the coastline, which feeds seawater into the powerhouse. From the powerhouse, the seawater is pumped into the upper storage reservoir using conventional hydropower technology, typically reversible pump turbines, using surplus electricity from the power grid during times of peak renewable-energy generation, or alternatively electricity from onsite renewable generation. During times of low renewable-energy generation, this water is released downhill, driving the pump turbines in generate mode and producing clean, carbon-free electricity. A portion of the water in the upper reservoir is also constantly discharged via the IPHROCES system’s powerhouse to feed the RO desalination plant, taking advantage of the pressure provided by the water column’s elevation to remove the salt molecules and create fresh water. 

IPHROCES has a number of advantages over conventional systems. It provides safe and robust energy storage and generation. The colocation and integration of pumped storage hydro with RO desalination achieves demonstrable cost reductions, energy efficiency, and emissions reductions. Depending on the location and on site-specific conditions, Oceanus expects to be able to reduce capital and operating costs by 20–30 percent, thereby providing the lowest levelized cost of energy storage and lowest levelized cost of water. 

In addition, the pumped hydro outflow quickly and efficiently dilutes the waste brine from the desalination process. The brine discharge is blended with discharge flows from the pumped storage facility so that the total discharge is diluted to ambient salinity levels by the time it flows back into the ocean. This brine management system allows IPHROCES to operate in compliance with California Ocean Plan standards. 

The fact that IPHROCES performs desalination using the hydraulic head created by storing water at a higher elevation means that it has a smaller energy footprint than conventional seawater RO plants. It uses 2.4 kilowatt-hours (kWh) of energy per cubic meter (m3) of water, versus the 3–5 kWh/m3 used by conventional plants. In addition, the 100 percent hydraulic RO system allows for a recovery rate of over 55 percent, higher than that of conventional plants. 

The IPHROCES process allows for the efficient use of excess renewable energy generation, using it to power a safe storage system and to create clean water without the need for exotic material batteries or fossil fuel consumption. 

Municipal Water Leader: Please tell us about the project you are currently developing in Chile. How much water and energy will it produce? 

Joan Leal: When I first joined Oceanus in early 2017, I evaluated market opportunities for Oceanus’s solution around the globe. There are two important aspects to consider when evaluating where in the world IPHROCES could be viable. First, our solution requires a specific geography: elevations of around 350 meters (1,150 feet) close to the coast, including a topography that allows us to build on-surface penstocks so that we can avoid tunneling and boring and thereby minimize costs and construction risks. Second, there must be a demand for both fresh water and energy storage. This dual demand is more common that one might think, since water needs in arid or semiarid regions of the world occur in the same areas where renewable energy resources are abundant and hence the need for storage is growing. Our initial focus has been the Americas; we have been able to identify many potential markets for our solution, including in Southern California, northern Mexico, the Caribbean, southern Peru, and northern Chile. 

Why is Chile an appropriate location? First, it is experiencing one of the most severe droughts ever recorded. 

The precipitation deficit in 2019 in the north of the country, according to Chile’s Directorate General of Water, was around 80 percent. Northern Chile is where most of the country’s mining activities are located, which has historically increased the need for new sources of water while also contributing to population growth. In addition, desalination in Chile is a mature market. Currently, 5,500 liters per second (l/s) of desalinated water are produced in Chile (around 194 cubic feet per second, or cfs). In the next 5 years, that figure will grow by 160 percent. There are 24 desalination plants in operation in the country, as well as 22 other projects at different stages of development. Around 80 percent of the existing installed desalination capacity is used by industrial users and mines. The municipal water agencies in the north have already started implementing desalination as the main source of potable water. Aguas Altiplano and Aguas Antofagasta already operate RO desalination facilities in the cities of Arica and Antofagasta, respectively, and Aguas Chanar/Econsa is building a 1,200 l/s (42 cfs) desalination facility in the region of Atacama. 

The electric market in Chile has been designed in such a way that the investment in and operation of the energy infrastructure are carried out by private operators, promoting economic efficiency through competitive markets in all the nonmonopolistic segments. Today, the energy sector is fully deregulated. The electrical grid in northern Chile used to be highly dependent on coal, and around 20 percent of current installed capacity still comes from coal thermo plants. However, Chile is committed to an aggressive decarbonization plan that aims to decommission 100 percent of coal thermo plants by 2040 in favor of renewable generation. As of 2019, photovoltaic solar installations represent over 10 percent of the country’s energy capacity, and renewable generation capacity as a whole makes up close to 20 percent. This transition in the energy sector is increasingly creating a need for long-duration and large-scale energy storage solutions. Chile is also one of the first countries in the world to regulate energy storage. Its new energy storage regulation is intended to promote new energy storage facilities, including pumped hydro storage facilities. 

Oceanus is focusing on northern Chile due the severe water scarcity there; the fast penetration of renewable energy into the local market; the lack of energy storage capacity; and the region’s geography, which is characterized by high cliffs along the coast. Oceanus has teamed up with one of the largest municipal water agencies in the country to evaluate and develop a desalination facility using Oceanus’s IPHROCES solution. The desal plant will produce over 1,000 l/s (35 cfs) of reliable freshwater and will cover 100 percent of the municipal water agency demand. The facility can also produce water for industrial users in the region. 

In addition, the facility will produce 200 megawatts of dispatchable energy to enable renewable energy penetration in the region and to further the country’s decarbonization plan. It will produce up to 16 hours of energy storage per day. According to the new Chilean energy storage regulation, the Oceanus facility will receive revenue from energy arbitrage, capacity payments, and ancillary services. 

Municipal Water Leader: Why is Oceanus’s product appropriate for municipal water agencies or providers? 

Joan Leal: One of the limitations that municipal water agencies in Chile face when implementing desalination projects is the high cost of desalinated water in comparison to current regulated potable water tariffs. Oceanus’s IPHROCES facility delivers the desalination of water at a low levelized cost, enabling its implementation not only for industrial users but also for municipal water agencies. Oceanus’s primary focus is to pass the benefits of our innovative and proprietary solution to the final users of both potable water and electricity. Besides the economic benefits, Oceanus’s solution is superior in terms of energy consumption and brine management, key challenges of the current desalination industry. 

Municipal Water Leader: Where are your other planned projects? 

Joan Leal: Oceanus’s flagship project is Oceanus IPHROCES Chile. We are also developing projects in Southern California and in northern Mexico. Oceanus’s solution can be applied globally and at different scales. We are constantly looking for new opportunities in other regions, including Australia and Central America. 

Joan Leal is cthe hief development officer at Oceanus Power & Water and the president of Oceanus Energía y Agua de Sudamérica. He can be contacted at joan@oceanus.pw.