In Australia, pumped storage hydropower’s star is rising compared with gas

Pumped hydro energy storage is “becoming an alternative technology to fill the role that gas was initially envisaged to play in transitioning … to the increased take-up of renewable energy by combining the need for fast acting capacity with the flexibility of operating at a variety of generation levels.”

This is according to a recent report released by RepuTex, an energy and emissions advisory firm in Australia.

RepuTex says that the expansion of the Snowy Hydro scheme and the extension of the Liddell coal-fired plant represent the two core pillars of the government’s energy policy framework. This report is intended to examine the impact of these measures on the market, namely the impact on wholesale electricity prices and the interaction with continuing elevated gas prices.

Some key findings:

  • Should no new energy policy be implemented, elevated electricity prices are largely projected to continue
  • Direction to keep Liddell open and be refurbished ($900 million in capital investments) may throw a wrench into the 4,000 MW of advanced renewable projects that have not yet reached financial close
  • Modeling indicates that reduced competition from renewable sources would result in the New South Wales fuel mix becoming increasingly dependent on expensive gas
  • The governments’ commitment to Snowy 2.0 could provide 2,000 MW of readily dispatchable generation that would provide support during peak seasons while providing greater flexibility to potentially mothball aging coal-fired plants for use in a reserve role
  • Investment in Snowy 2.0 could offset expected uncertainty over the extension of Liddell
  • Even with Snowy 2.0, any large reinvestment in Liddell would be likely to jeopardize about 1,000 MW of advanced-stage renewable energy projects

In fact, RepuTex says, “Critically, considering increasing gas prices, pumped hydro energy storage is able to increasingly serve as a lower cost substitute for gas, with the added advantage of complementing low-cost variable renewable energy through increased flexibility and system balancing, rather than displacing it.”

“The outlook for gas to play a larger role in the energy mix is therefore dimming.”

To see more insights from the report, click here.

In HydroWorld’s latest report on Snowy Hydro 2.0, editor Michael Harris reported that additional federal funding was announced in August to help expedite feasibility studies for an expansion of the Snowy Mountains pumped storage project, increasing the output capacity by about 50%. Current capacity is 3,756 MW.

Click here for more information on pumped storage hydropower worldwide.

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