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Pumped hydro is key to Australia's energy future

By 2040 the vast majority of Australia’s coal-fired power stations will have ground to a halt and the nation should be running on 85% renewable energy. Pumped hydro will be key to that transformation.

Pumped hydro energy storage (PHES) systems could serve as Australia’s batteries in an energy market increasingly dominated by variable renewables.

The Australian Energy Market Operator (AEMO) has found that the most cost-effective way to replace the nation’s ageing coal-fired power plants over the next 20 years is to boost solar power generation to 28 GW, increase wind power production to 10.5 GW and lift battery storage to 17 GW.

That’s no mean feat, said Chris Gwynne, project director of Hydro Tasmania’s Battery of the Nation (BotN) initiative.

“If I told you that we needed to replace nearly all of the nation’s road infrastructure in 20 years you’d be thinking ‘how on earth will we ever do that?’” he said.

“But, essentially, that’s what we’re doing to the power system.”

Why pumped hydro?

Pumped hydro has a significant role to play in Australia achieving the goal of 17 GW of storage by 2040.

As Professor Jamie Pittock from the Australian National University’s (ANU) Research School of Electrical, Energy and Materials Engineering explained: “Pumped-storage hydropower will enable Australia to transition to a 100% renewable electricity supply by storing excess wind and solar power for dispatch on demand. 

“Because pumped-storage hydropower uses cheap, excess electricity and stores this energy for dispatch when demand peaks, it is likely to be most profitable.”

In the pipeline

There is currently very little large-scale pumped hydro in Australia, however, the nation’s major producers of traditional hydropower – Snowy Hydro and Hydro Tasmania – have announced plans to introduce significant pumped hydro to their portfolios.


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The approved Snowy 2.0 pumped hydro project has a capacity of 2 GW, while Hydro Tasmania has set its sights commissioning a 500-600 MW plant by 2025.

Hydro Tasmania Chief Executive Steve Davy said: “Hydro Tasmania will spend up to $30 million investigating opportunities across our current assets and to assess the suitability of each of the pumped hydro sites for development. We aim to identify and build the first project so that it can be ready in the next five years."

There are at least a further 19 projects under development or feasibility assessment, according to Pittock.

“Those projects could add about 6000 MW capacity to the National Electricity Market (NEM),” he said.

“Many of the new pumped-storage projects involve redeveloping old mine sites – the 270 MW Kidston project in north Queensland is re-using two disused gold mine pits.”

Meanwhile Pittock’s ANU colleague, Engineering Professor Andrew Blakers, has concluded that there are at least 22,000 suitable PHES locations nationwide.

Uphill battle

Tasmania alone offers considerable pumped-hydro potential at 14 sites, which could represent around 4800 MW of reliable, cost-effective capacity.

However, as BotN initiative Project Director Chris Gwynne is well aware, there are significant challenges ahead, starting with the Bass Strait.

“If we don’t have more interconnection between Tasmania and Victoria there isn’t really the opportunity to develop a pumped hydro project,” he said.

"Pumped hydro may well give us more flexibility in how we manage water sustainably."

Chris Gwynne, BotN Project Director

In February last year, Prime Minister Scott Morrison promised to supplement the existing Basslink electricity interconnector with a second link to the mainland, and committed $56 million to seeing it become a reality.

“If it’s a 1200 MW interconnector that opens up the opportunity to develop around 600 MW of pumped hydro, that’s essentially one project for us,” Gwynne said.

“If we had three to four more interconnectors we could probably contribute 2500-3000 MW of pumped-hydro over a 20-year period.”

More broadly, however, there is the challenge of ensuring that the NEM supports investment in storage.

“The current NEM was designed in the 1990s when we essentially had a bunch of state-based power systems that were heavily dominated by coal-fired generation,” Gwynne said.

“We are heading into a very different environment where it’s most likely that there will be large amounts of wind and solar, which will become like base-load power, and then you’re going to need significant amounts of storage in the system to make it all work.

"There’s a lot of active discussion about whether or not the current market design can reward storage in a way that will support investment coming online when needed.”

A third major challenge is gaining community support for pumped hydro.

Professor Pittock said industry and government need to enhance their social licence before deploying the technology.

“Consultation and careful site selection is needed to place pumped-storage projects in places that provide maximum benefits and avoid those that have negative environmental and social concerns,” he said.

Pittock suggested retrofitting old mine sites or hydropower plants, and locating pumped hydro near existing transmission lines, would be good first steps.

“The large volumes of water used for cooling thermal power stations in places like the Hunter and Latrobe valleys may become available for other uses,” he said.

Water-energy nexus

While traditional hydropower projects can have significant social and environmental impacts, PHES would generally create less disturbance, Pittock said.

“Pumped-storage hydropower recirculates water between upper and lower reservoirs that often have small surface-to-volume ratios, so they may lose relatively little water to evaporation.

"The conversion of some traditional hydropower systems to pumped storage should enable better environmental flow releases to restore the health of lower reaches of regulated rivers," he said.

Gwynne is already starting to think of the new water management opportunities.

“If you’ve got a weather event coming and you know that you’re going to be spilling, there may be opportunities to pump water into a new reservoir. Pumped hydro may well give us more flexibility in how we manage water sustainably.”

First published as ‘Liquid gold’ in Current magazine October 2019.