Finkel Review highlights pumped hydro as key to renewable energy plan
Australian Chief Scientist Alan Finkel’s report into the National Electricity Market has found the water industry could play a key role in reducing the energy sector’s emissions.
The report’s key recommendation was the adoption of a Clean Energy Target, which would mandate that energy retailers provide a certain amount of electricity from low-emissions or renewable energy sources.
The review directly mentioned pumped hydro as a likely form of storage alongside the use of variable renewable energy sources such as wind and solar, said Dr Matthew Stocks, researcher at the Australian National University College of Engineering and Computer Science.
“Pumped hydro is much cheaper than batteries for large scale energy storage,” Stocks said.
“Due to their closed loop nature, these are likely to use less water than existing fossil fuel generators.”
Stocks mentioned there will be a greater demand for conventional hydro as well to boost the amounts of renewable energy entering the system.
“The value of the water for energy will likely lead to increased tension between the needs of irrigation and power generation,” he said.
“Our modelling work has indicated that conventional hydro is likely to be most needed to get us through a cold, wet week in winter.”
The report provides necessary motivation to formulate a clear policy that reduces uncertainty, Stocks added.
“The Climate Change Authority and the Australian Energy Market Commission have shown that risk associated with current uncertainty has contributed to under-investment and price increases around $40/MWh,” he said.
Additionally, investment in pumped hydro technology could be one of the most cost-effective ways to meet the Paris Climate Agreement targets.
“The electricity sector is by far the cheapest and easiest sector to reduce Australia's emissions and should be taking a greater share of the Paris target,” he said.