NSW plays to its pumped hydro strengths, with green light for Shoalhaven

New South Wales – pinged again this week for being in the slow lane on renewable energy development – has made a couple of key strategic moves on pumped hydro, including giving approval for the first stage of the proposed $300 million Shoalhaven expansion project.

State planning minister Rob Stokes said on Tuesday that his department had given Origin Energy the go-ahead for geological works for the major upgrade at its Shoalhaven Pumped Hydro Storage Scheme.

The project stands to double the capacity of the Southern Highlands generator, from its current 240MW to 475MW – potentially making it the second largest pumped hydro facility in Australia.

Of course, pumped hydro has a couple of key advantages over other renewable energy resources: one being the full and unqualified support of federal energy minister, Angus Taylor; the other, its increasingly valuable in-built electricity storage properties.

“Pumped hydro stations act like a battery,” said NSW energy minister Matt Kean in comments on Tuesday. “They provide firm energy when intermittent sources of power like solar and wind are offline.”

And of course the Shoalhaven expansion would help the NSW government achieve its deceptively ambitious target of net-zero emissions by 2050 – a big ask at current progress levels, according to the latest report from Green Energy Markets.

Hence its status as a Critical State Significant Infrastructure project, awarded late last year.

“The Shoalhaven Hydro Expansion project would go a long way in helping NSW transition to a clean energy future,” Kean said.

For Origin, the project has been described as an “obvious” and “really good investment,” as renewables are added to Australia’s National Electricity Market at an increasingly rapid rate.

“Shoalhaven is a pretty good investment in its own right, and it’s a good fit for the system,” Origin’s head of energy trading and operations Greg Jarvis told RenewEconomy in an episode of the Energy Insiders podcast last October.

“The transmission capacity is there, and it has got spare capacity.”

The green light for early works on Shoalhaven follows news that government-owned Snowy Hydro has reached out to Victoria’s Labor government for support in running a major new transmission line between the NSW pumped hydro scheme and Melbourne.

A report in The Australian newspaper on Monday said Snowy chief Paul Broad had sent a letter last week to Victorian Premier Daniel Andrews, Treasurer Tim Pallas and energy minister Lily D’Ambrosio seeking their support for the infrastructure investment.

Already, Snowy is in talks with Victorian utility AusNet, the paper said, and is proposing to pay an annual fee to AusNet to help provide backing to fund the transmission line.

RenewEconomy has sought a response to the report from both the Victorian government and AusNet.

Obviously, Snowy has its own next-level expansion plans, with the 2.0 pumped hydro scheme aiming to add 2000MW of capacity and 175 hours of storage to the national grid – likely at a cost of more than $6 billion, plus transmission infrastructure.

As Giles Parkinson noted here, given the amount of coal-fired generation due to retire over the next 20 years in both Victoria and New South Wales the share of storage required will be significant, particularly as solar becomes the largest contributor to the grid.

In comments to The Australian, Snowy chief Paul Broad appears keen to add some urgency to the task of adding new transmission infrastructure.

“They’ve got issues out in the Latrobe Valley, now, where some coal plants are having troubles,” he said.

“You can’t time these transmission upgrades based on the retirement dates of coal plants.”

“We have 1500MW of existing Snowy today we could have got into Victoria in the summer, which would have kept our lights on. But we couldn’t get it in there due to transmission constraints.”

But NSW is not the only state with pumped hydro plans and ambitions. Queensland, of course, has the landmark Kidston Renewable Energy Hub, that in April began early works its 250MW pumped hydro component, which will supply up to eight hours storage using the existing pits of a former gold mine.

And in South Australia, AGL Energy has announced plans to build a 250MW/2000MWh pumped hydro energy storage project in an old copper mine about 55km south-east of Adelaide.

And in Tasmania, Hydro Tasmania, with the enthusiastic support of the state government, is looking at its own extensive pumped hydro plans to dovetail with increased wind energy and new transmission lines to the mainland to become the “battery of the nation”.

As for Shoalhaven, the NSW government says Origin Energy will now need to submit an Environmental Impact Statement before it can get to the main upgrade works, involving the construction of a hydroelectric pump and power station.