Tasmania may double size of hydro plant, in first step of big battery plans

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ARENA backs feasibility study in Hydro Tasmania’s plan to double capacity of 104MW Tarraleah Hydro Scheme – a “start” for bigger “battery of the nation” plans.

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Tasmania’s bid to become the ‘battery of the nation’ gained some substance this week, with plans to redevelop one of the state’s oldest hydro power stations winning renewed federal government support.

The Australian Renewable Energy Agency said on Thursday it had granted up to $2.5 million in funding to Hydro Tasmania to complete a $5 million final feasibility study into the proposed redevelopment of the Tarraleah hydropower scheme in Tasmania’s highlands.

The project, if found to be technically and economically feasible, would more than double Tarraleah’s capacity from 104MW to 220MW, and 20 hours of storage in one cycle.

Hydro Tasmania CEO Steve Davy said the upgrade would also serve as a good starting point for the state’s broader ‘Battery of the Nation’ plans, which – as we have reported – are focused on developing a up to 2.5MW of new pumped hydro capacity, and new wind power projects.

“While pumped hydro and wind power attract most of the attention, getting more electricity from our existing hydropower assets will also be crucial,” he said.

“We can start by finding another 116 MW from Tarraleah. This upgrade will also transform Tarraleah into Tasmania’s first truly 21st century hydropower station – adding stability and flexibility to Australia’s future clean energy market.”

The new Tarraleah study follows up on a pre-feasibility study, also backed by ARENA, that found that boosting the 19030s built plant – which currently generates around 6.5 per cent of Hydro Tasmania’s annual output – would support a future with higher levels of variable renewable generation.

“The report helps our understanding of future development opportunities in Tasmania and how they could make a larger contribution to the National Electricity Market (NEM),” said ARENA CEO Ivor Frischknecht in comments on Thursday.

“Tarraleah can play an integral part in Tasmania’s Battery of the Nation initiative, setting up a blueprint for increasing the state’s renewable resources to support the future NEM,” he said.

The new feasibility study is expected to take about 18 months, Hydro Tasmania said, with the preferred option of redeveloping the Tarraleah plant expected to cost up to $500 million over three years.

Federal energy minister Josh Frydenberg said the redevelopment project – if it went ahead – would create hundreds of jobs across the Derwent Valley and Tasmania.

“The potential redevelopment of the Tarraleah Power Station builds on the identification of 14 high potential pumped hydro energy storage sites across Tasmania, which early modelling shows, if developed, would create up to $5 billion of investment and around 3000 regional jobs,” he added.

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26 Comments
  1. George Darroch 5 months ago

    This is excellent work by Hydro Tas. They’ve got huge assets that are a lot more valuable in a variable generation system than they ever were with invariable coal. Time for another interconnector and for Tasmania’s contribution to be fully appreciated.

    • john 5 months ago

      Yes it would appear so Tasmania needs a second interconnection.
      I note the mention of wind and considering Tasmania is in the { Roaring Forties } or near enough they do have good wind potential.
      Cover note however how is the water availability?
      Just remember not that long ago there was a curtailment of hydro generation due to low water levels.

      Am not trying to put cold water on the idea however perhaps PHES should be put into the equation.

      • Andy Saunders 5 months ago

        Curtailment of hydro generation due to running flat-out to cash in on LGCs, more pertinent!

      • Peter F 5 months ago

        PHS would not have solved Tasmania’s drought problem.
        a) 300 MW of wind installed 2-3 years earlier would have left enough water in the dams OR
        b) starting the CC gas plant the day after Basslink went down and keeping it running would have solved the problem for far less cost than their imported emergency diesels OR
        c) not overselling hydro during the carbon tax period would have left sufficient reserves in the dams

  2. Mark Diesendorf 5 months ago

    This is fine, provided the redevelopment doesn’t involve increasing the surface area of the existing dam or building a new dam in the environmentally precious highlands of Tasmania.

    • RobertO 5 months ago

      Hi Mark Diesendorf, I am a little more pragmatic about Hydro, everything we humans do has an environmental impact and I prefer to look at all options first before ruling out any option. Hydro is better than coal or gas and given they are using gas in Tassie to make electricity (seems part time).

    • Ian 5 months ago

      Tasmania is a beautiful place, no doubt about that, years ago hydro development was stopped because of environmental concerns. This “battery of the nation” aspiration may be just the ticket developers need to continue spoiling the environment. There are many things to like about developing wind resources and hydro power capacity and upgrading Bass interconnectors, but to do this without increasing the industrial footprint is the issue.

      Forget about two way flows of electricity, but consider Tasmania as a type of self-charging battery: Assuming hydro generating resources are upgraded, some appropriate pumped hydro installed and wind and solar developed all sufficient to export energy to the main land using Basslink 1 and 2 at say 1100MW for 70% of the time . What would be the capital flow to Tasmania? at 10c/kWH ? $674 million a year is the answer.

    • Nick Kemp 5 months ago

      I see your point – I think our first target should be to power Tasmania primarily from wind power and solar and keep the dams at near capacity for when there isn’t enough of that.

      Second to that comes pumped hydro if we ever need it. I’m not sure why we need to increase the generation from Tarraleah unless its efficiency gains (i.e we can generate more electricity from the same volume of water)

      The battery of the nation idea sounds like a political soundbite more than a possible reality when the mainland has plenty of potential on it’s own without being plugged in to Tasmania by undersea cables which seem to be very hard to repair if they break down.

  3. Peter F 5 months ago

    Increasing the peak power of hydro schemes without major civil works is the most logical way of improving the support of variable renewables. It can be 1/2 to 1/3rd the cost of pumped hydro. Matching the 100 MW increase in capacity with another 150-200 MW of wind would enable Tasmania to export another 500-600 GWh annually.
    However if an extra transmission link is required it will probably kill the economics.

    • Ian 5 months ago

      Well, actually not, although the initial cost of an interconnector seems high , it generally has a long servicible life and can transfer a lot of electricity over time especially if it exports at its nameplate capacity constantly – baseload type exports. Losses through HVDC are not that high. The per megawatt cost is very cheap. Which ever way Tasmania generates electricity for export, either through wind and the judicial use of once-through hydro, or through wind and pumped hydro combinations, the interconnector will not add much to the cost.

      Tasmania’s competitors on the mainland would be solar and wind projects far out in the outback and that snowy hydro thing. These would also need hefty interconnectors but dropping a cable to the bottom of the sea is probably a lot cheaper than land based transmission lines.

      Check out the report commissioned on this 2IC:

      https://www.environment.gov.au/system/files/pages/014e6ca4-f681-4ea5-a671-3301dde84217/files/final-report-feasibility-second-tasmanian-interconnector.pdf

      • eddierothmanisatool 5 months ago

        Not very much? How about 1.5 billion for a second interconnector. And cheaper to lay undersea cable? Really?

        • Ian 5 months ago

          Alrighty then, thank you so much for your objection;) analyse the figures a bit more maybe. Expected life is 40 years, expected utilisation 70% of nameplate capacity, maintenance costs

          • Peter F 5 months ago

            a) your estimate of the cost is too low. Various estimates have been proposed but none less than about $1.2 m/MW. b) if it is privately owned the weighted cost of capital will be about 6.5%+ probably more now that interest rates are creeping up and c) it won’t run at anything like 70% CF because wind + solar power in Victoria will quite often be sufficient to cover demand. Adding these in + the losses pushes the cost up to about $50/MWh + the cost of the power. Even allowing for higher capacity factors of Tasmanian wind farms that is much more expensive than just adding more Victorian wind and solar

          • Ian 5 months ago

            Not my estimates these are taken from a paper by a government sponsered paper:

            https://www.environment.gov.au/system/files/pages/014e6ca4-f681-4ea5-a671-3301dde84217/files/final-report-feasibility-second-tasmanian-interconnector.pdf

            My post was in response to eddierothman and he quotes a cost for this HVDC Basslink of $1.5 billion for 600MW. This figure seems to be roughly right. Government bonds are 2.5 to 3% and 70% utilisation is probably not far off the mark. But hey, let’s use your figures for interest rate and let’s guess a utilisation of 50% and see where this takes us. 40years is the design life:

            Interest and capital payment per year $105 360 000
            Maintenance cost $ 16 700 000
            Total cost per year $122 060 000

            Electrical energy transmitted 600MW x 24 x.5 x365 =2.6TWh

            Cost per kWh 4.64c/kWh

            Your figure was 5c/kWh

            2.7c/kWh , 5c/kWh both figures are not high compared with the retail cost of electricity . Maybe there is something I’m missing.

            What would you consider a reasonable cost of transmission?

            Perhaps you are thinking of the “Tasmania as a battery of the nation” idea. That clearly starts to add to the costs somewhat. The only economical way Tasmania’s renewables resources could be mobilised for the rest of the East Coast would be one way flows of electricity. ie a “self charging battery of the nation” if you want a catchy name. In the past Tasmania has overestimated its hydro resource and fallen foul with the loss of its Basslink. A second Basslink would allow electricity exchange from the mainland to Tasmania in high quantities, allowing for more security and dispatchability for both sides of the strait.

          • Peter F 5 months ago

            I think there is a lot of common ground between us, however the key figure is that the transmission cost is added to the power cost.
            Incremental export energy in Tasmania will come from wind. Wind in Tasmania + AC transmission to the DC terminal will cost about $55. $46 for the DC link and $3-5 AC to the load centre a round $100 not including the cost of the pumped hydro.

            Therefore one way exports from Tassie might work with a new link and a lot of new wind but not adding the cost of the pumped hydro.

            If you are sending power from a Victorian wind or solar farm to Tasmania AND back again, the maximum system efficiency is about 56%. The system is exporting less power than it is exporting so it can only export about 1/3rd of the time. When you follow through the cost of Victorian power x by the transmission losses and add the cost of the transmission link and pumped hydro using Tasmania as Battery of the nation is quite untenable
            see http://www.openforum.com.au/the-battery-of-the-nation-is-an-expensive-boondoggle-in-the-age-of-distributed-resources/

          • RobertO 5 months ago

            Hi Peter F, No electrical company is going to base their decisions on efficiency, so quoting me a 56% loss is a load of rubbish. I do not believe that Hydro Tasmania has an intention of importing power to run PHES in Tasmania and then to export that same power back to Victoria unless they can make a profit doing it. I believe that they are aiming more at storing local wind (and some minor solar or Hydro which will spill if they do not use it) in the PHES and exporting it only when it profitable for them to do so. If there is a second interconnect then I suspect it will be larger and mostly export only. The whole system will be driven by profit (with business case that will not see daylight).

          • Peter F 5 months ago

            So we agree they will not import power to recharge their PHS. They have 2.3 GW of hydro already and peak demand of 1.1 GW so as long as they have enough wind to cover the energy they can guarantee 1.2 GW exports 24/7 without PHS.
            Maybe one small 200-300 MW plant could be justified but it is very doubtful

          • RobertO 5 months ago

            Hi Peter F, You are very good at theory, but your pracactility sucks. What happens to the energy flow between Tassie and Vic if the wholesale price in Vic goes negative. Are Hydro Tasmania (HT) going to increase their exports to Vic, or are they going to find a way to import from Vic. If HT are able to make a profit from importing then they will (even if it is only a few cents per MWhr). It not in HT interest to put FF out of business because they will provide the opportunity for HT to make a profit (and if the price is negative, about $40 is my guesstimate but you are better at calculating this sum than I am), it would even pay HT to build some PHES systems.
            I still think that a second interconnector to Vic and security and / or community benefit say via King Island as the main drivers (our pollies are not very economically driven ) will be built. If it is built then a lot of wind will follow and my own estimate is that Tassie will go from a net importer to a net exporter (about 50% – 75% of the capacity of both interconnects) and some of that export will be H2 into the Natural Gas pipeline (spilled RE of any sort)

            Anything built in Tassie by HT will be based on the idea that HT is going to make a profit (somehow). The general public will never see the business case other than a general overview
            Even the interconnect may bypass the R-Rit (or whatever it called) process based on the grounds that security of supply (or a community reason) is more important.

        • Ian 5 months ago

          Look at it this way: the cost to sling an AC400KV line carrying about 600MW across the landscape without considering land purchases is $1 to $1.5 million a km. The Basslink 2IC cable 300km long carrying 600MW would cost $560Million – substations and connecting land links make up the rest. Much of a muchness ,only, overhead land transmission lines are particularly ugly, marine lines are out of sight, out of mind.

    • David Osmond 5 months ago

      Hi Peter,

      A while ago on the Conversation, you wrote that with some upgrading of mainland hydro, it should be able to generate at 4-4.5GW for up to 340 hours. I’m keen to understand this better. Can you elaborate on which hydro stations would need to be upgraded? Thanks,

      • Peter F 5 months ago

        David I don’t think it was me but from memory there is some 6.5 GW of hydro on the east coast of which about 2.3 GW is pumped hydro with an average of 8 hours storage. so in theory you could have say 90% of 4.2 x 340 GWh + 80% x 2.3 x 8 GWh = an average of 3.8 GW for 340 hours.
        A very detailed study by the US department of energy suggested that US hydro capacity could be increased by 10% with no new dams. The US has a higher proportion of run of the river hydro than us so it is arguable that we can increase output by more particularly at places like Eildon, Dartmouth etc that have relatively small hydro facilities and adding mini hydro plants to regulating pondages, small hydro free dams etc by 15-20%. Thus 4-4.5 GW continuous and 7-8 GW peak for 3-4 hours is do-able
        These plants would produce expensive power because utilisation would be low but it does not have to eliminate many $14,000 price spikes to be worthwhile.

        However 340 hours is an unnecessarily long duration, the sun comes up every day and the wind blows every day. Even if you have three low wind days in winter, average wind output is still 15% of capacity and solar about 8% so that dictates the worst case storage. In summer there is much more solar and more than offsetting low wind and East Coast highs never last more than three days. Once we reach 30-40 GW of wind and 50-70 GW of solar there will be weeks at a time where we don’t need hydro at all so the hydro stations can be re-configured to be high power peakers, sometimes just bey rewinding the generators, other times increasing penstock and turbine size, occasionally by raising dam wall a bit to increase head

        • David Osmond 5 months ago

          thanks for the reply Peter. June last year was a terrible month for wind, and also solar. It won’t be as bad in the future once we have more wind in Nth NSW and QLD, but we will never-the-less still have some bad months (and fortnights and weeks). I’m curious how hard we can run hydro during these bad patches. By my calcs, NEM hydro occasionally exceeds 5 GW on a 30 minute basis, but they are only brief peaks. The daily averages never get over about 3.2 GW for NEM hydro. I’m curious if this is because of dam capacities etc, and if it is possible to make some affordable upgrades so that NEM hydro is able to sustain 4+ GW over a period of days to a week.

          • RobertO 5 months ago

            Hi David Osmond, Currently we run Hydro as needed and we we call that just Hydro. Some of the early designs and buildings were not very well built, but we can change some of the designs (refurbishment) of intakes, Penstocks (pipes of less resistance or larger flow or more pipes for just larger flow) to more turbines or larger turbines. This allows the system to become a peaker Hydro (same H2O volume , but shorter time frame say down from 24 hr flow to 3 hr morning, and 6 hr in afternoon. This also allows for more H2O to be stored in the existing dam but runs increase risk of overflow (spill). If you raise the Dam height then you are increasing the volume in the dam hence you increase the capacity of that system. Adding PHES (Snowy 2) allows more Hydro to be used (but you also need to recharge those systems and there may be better choices that Snowy2, 2GW @170 hr). Most PHES systems will be for shorter time frames 4 hr to 8-12 hr only. We will need longer (larger time frames) if we chose little or no additional interconnects or if we chose less solar and less wind (security of supply could become an issue). Run of the river hydro depends on the ability to slow the volume of the river.
            Hydro at this time is run as a peaking hydro system based mainly on making profit. Some systems have other requirements such as irrigation requirements. They are easy to start and easy to stop (very quick to start slightly slower to stop). All hydro systems work well with RE and PHES systems can change from production to pumping in a matter of several minutes, time to stop the turbine spinning and some use H2O to slow them down (produce energy or absorb energy)

            https://reneweconomy.com.au/tasmania-touts-its-battery-of-the-nation-half-the-cost-of-snowy-2-0-55880/

            Down the bottom is a table that has both storage and generation name plate. The best one is 320 hr (13 days) but only 84 MW. The next best is 47 hr at 600 MW name plate. Note none of these will be done if there is no interconnect built or planned to be built (and again security of supply says that we should build 1 more into tassie).

          • Peter F 5 months ago

            It is very complicated because water has to be preserved for irrigation, there are issues with downstream flooding if power stations run too long at full power etc, some of these can be mitigated by increasing capacity of regulating pondages etc. but generally speaking it is reasonable to assume that it would be technically possible to increase the 4 hour peak generation by between 10 and 20%. The question is whether it is cheaper to do that, run gas turbines on a renewable hydrogen mix, build more solar thermal or perhaps subsidise behind the meter thermal and battery storage or even build off river pumped hydro like the various SA projects.
            June last year was a pretty poor wind month but the longest low wind period was 72 hours. Increasing diversity of locations and increasing introduction of low wind turbines should push minimum 72 hour capacity factor to at least 15% and the system will be designed on the basis of no more than 40% CF so in effect you will be able to count on about 1/3rd of normal wind generation for any periods longer than 72 hours and probably at least half normal generation for any period as long as .
            By overheating hot water systems and so-on it is relatively inexpensive to reduce heating demand for 2-3 days, most EVs need to charged every 4-5 days etc so in a properly designed system a large share of the variable output of wind and solar will be compensated by controllable loads as much as increased storage

  4. Nicko 5 months ago

    Curious that Sophie puts the standard ‘zillions of jobs’ nonsense from a politician (one as slimy as Frydenberg too) at the end. For balance? I would have thought this audience would not be easily fooled by blown out exaggerated job claims.

    Getting more out of dams in Tassie is OK, but not new/higher dams to flood more rivers.

  5. RobertO 5 months ago

    Hi All, While we all argue about the cheapest way to go to RE in Australia we are all missing the point. It not about cheap electricity today or tomorrow. If it turns out that human beings should have put a price in Carbon of say $5.00 a ton then at some stage in the future human beings may be called upon to pay that price (think agriculture and what happens if we raise the temperature of earth by 2 degrees C. Think about all the people that have to move and how much agricultural land we will lose).
    The prize is not cheap electricity but saving the planet. The byproduct is cheaper electricity by RE
    We may be better off if we do something today rather than waiting until next decade.
    Yes it costs us money but it may turn out to be a lot less than if we wait.

    We are one of the highest GHG polluters per capita and we should lead the world given that we have possibly the best RE supplies in the world.

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