One of Australia’s biggest pumped hydro projects cancelled due to “economic and timing challenges”

Rising costs and timing challenges have prompted Singapore-owned Alinta to dump its proposed Oven Mountain Pumped Hydro project, cancelling a venture the company had touted as “a critical project for the NSW energy transition”.

In a short statement inserted at the top of Alinta’s Oven Mountain website, the company said it had made the “difficult decision” to discontinue work after an extensive assessment.

The project, which was granted “critical state significance status” by the then Perrottet coalition government in 2020, was later expanded to propose a 900-megawatt “off-river” pumped hydro capacity for eight hours, or enough to power more than 600,000 homes.

“Economic and timing challenges on key elements of the project, including a critical transmission line, made it unviable to proceed,” Alinta said, in a statement.

“This decision follows years of technical studies, planning, stakeholder engagement and project development activities,” it said. “All available options were carefully considered before determining the project was no longer viable to progress.”

Alinta was bought by Singapore’s Sembcorp Industries last December, with the takeover completed in June.

Pumped hydro was not listed separately in a June media release, with Sembcorp instead stating it would “integrate a scalable platform in Australia that includes Alinta’s 3.4 gigawatts operating portfolio and 10.4 GW development pipeline” with the conglomerate’s global capabilities.

Alinta said it sincerely thanked “the community, Traditional Custodians, landholders, MPs and council representatives, suppliers, key agencies, and many other key stakeholders who have contributed their time, knowledge and feedback throughout the development process”.

Pumped hydro projects typically have long operational lifetimes but they have to compete against big batteries that are typically modular and can be built much faster. As seen with Snowy Hydro’s much larger 2.0 project, geological complexity and rising construction costs can add to pumped hydro’s competitive challenges.

Renew Economy has sought additional comment from Alinta.

A state government spokesperson said that since the 2023 election, “the capacity of renewable energy projects in operation has increased by over 88% and large-scale battery storage operating has increased more than twenty-fold” in NSW.

“The previous government allocated a grant to this project through a program which acknowledged that not all supported projects would be completed,” the spokesperson said.

“Interest is strong in the New England Renewable Energy Zone and this project was not planning to connect to the new transmission infrastructure being built.”

Oven Mountain had planned to link two reservoirs in a region northwest of Kempsey in northern NSW, with a height of 600 metres between the two dams.

In 2024, Alinta signed an early contract agreement with Malaysia’s Gamuda, in a joint venture with Spain’s Ferrovial Construction, which was to include “project design and constructibility” work.

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