Tasmania ups quest to become renewable energy “battery of Australia”

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ARENA tips $2.5m into feasibility studies for doubling of Tasmania hydro capacity and developing 2.5GW of pumped hydro storage.

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The potential for Tasmania to double its renewable energy capacity and serve as the “battery of the nation” is set to be explored via two new feasibility studies, backed this week by the Australian Renewable Energy Agency.

ARENA said on Friday it has committed up to $2.5 million, an amount that will be matched by the state government-owned utility Hydro Tasmania, to explore the feasibility of expanding the state’s hydro power capacity and developing “significant” pumped hydro resources to store and dispatch renewable energy.

According to Hydro Tasmania, the company has identified 30 potential pumped hydro energy storage sites in four regional areas of the state – a list it hopes to trim to 10-15 via the feasibility study.

Once fully realised, the utility expects those 10-15 pumped hydro sites to generate up to 2,500MW of electricity, which would double Tasmania’s current hydro capacity and provide flexible, dispatchable energy when needed by customers – both in the state and on the mainland.

The development of the PHES sites also promises to create up to $5 billion of infrastructure investment in the island state, and up to 3,000 jobs across a 10 to 15 year construction period, Hydro Tasmania said.

“The Battery of the Nation is about energy security and affordable prices,” said Hydro Tasmania CEO Steve Davy on Friday.  “Doubling Tasmania’s renewable energy capacity addresses three big challenges at once.

“It will lock in full energy security for Tasmania, help give Tasmanians some of the nation’s cheapest power prices, and give us plenty of spare energy to support mainland Australia.

“At a time when Australia badly needs flexible and storable energy to replace the coal power it’s phasing out, the Battery of the Nation offers a future that’s clean, reliable and affordable,” he said.

For ARENA, the feasibility studies are about further examining the role that pumped hydro energy storage can play in accelerating Australia’s transition to renewable energy.

“These feasibility studies are the first step towards significantly upgrading or replacing some of Tasmania’s existing power stations and introducing pumped hydro energy storage,” said ARENA CEO Ivor Frischknecht.

“With these projects, we could more than double Tasmania’s hydro capacity and power an additional 500,000 households. Tasmania could play a crucial role in helping to provide secure, reliable – and renewable – electricity for the National Energy Market,” he said.

The power stations slated for upgrade in the feasibility studies would include the Tarraleah Power Scheme and the Gordon Power Station, Hydro Tasmania said.

In the case of Tarraleah, an 80-plus years old power station in the Derwent Valley, a new power station would be built, at a cost of up to $650 million, increasing the energy output by up to 200GWh a year.

The redevelopment of the 432MW Gordon Power Station – Tasmania’s largest – would involve building a new turbine, to better manage water flows and allow more efficient generation.

The initial stages of these studies, jointly funded by ARENA and Hydro Tasmania at a cost of $1 million, are expected to be completed by the end of the year. Depending on the outcomes of the studies, construction on the Gordon Power Station augmentation could being as early as 2018.

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  1. RobertO 1 year ago

    Tasmania with its wind, hydro and pump hydro needs the second interconnect Basslink 2 built ASAP as a “community project” rather than waiting for improvements in wind or hydro. Build it via King Island and it will be the “Battery of the Nation” . Wind and Hydro are a perfect match

    • Daniel Boon 1 year ago

      ‘a community project’ .. that double talk for public funds to pay for and Hydro Tasmania to gouge consumers?

      • RobertO 1 year ago

        Hi Daniel. No way Hydro Tasmania already do that of their own accord. There are too few power players in the market already and we need more not less. Introduce more competition (if your a generator you cannot be a retailer, or if your a transmission you cannot be a retailer or a generator. At this time most wind farms sell their LGC to the retailers as part of sale of electricity for effective price of $0.00 after the retailers fought against the MRET and they should be stopped (force them to buy on the open market if we keep a MRET). Better might be to remove all subsidsation of all power including Diesel rebates, excerise tax.
        King Island has no optical fibre so as a community service lay in a power cable to King Island, remove people right to object to buildings of any sort (including wind turbines at say 4 times tip hight plus 2 times micro siting requirements to existing inhabited houses only). The costs of the fibre is about $250,000 (if included in a power cable), the costs of the extra distance is about $100 million but King Island has a potential of 1000 MW (+) at a capacity factor of say 40%. Bass Link 2 price was between $700 million and $1100 million and will not be build untill Tasmainia has more than 1000 MW of wind (additional 700 MW) and there is a better case if SA – NSW has an interconnect first. Robin Island plan is up to 1000 MW will not start until there is a second link.

  2. George Michaelson 1 year ago

    This is one of those ‘start now’ things. They need to start building the interconnect and inter-site connectivity now. The actual PHES can follow. If they wait for the PHES before they upgrade Basslink, the whole thing’s project management lifetime doubles or worse. Even from a resiliency sense, a second link makes sense. Why not just do it?

    • Mike Shackleton 1 year ago

      Even if they don’t go ahead with the pumped hydro option, doubling the capacity of Basslink would greatly expand Tasmania’s ability to develop its wind resource. If dam turbines can be turned off (outside of spilling seasons) when wind energy is high, you effectively have a form of battery storage that doesn’t have the pumping losses associated with sending water back uphill.

    • Daniel Boon 1 year ago


  3. Mike Westerman 1 year ago

    Now this is a serious proposition together with Basslink 2! Income from a state doing it tough, firm power support for Vic, making space for several GW of wind!

  4. Tom 1 year ago

    Sorry, but this is all rubbish.

    Tasmania does not need any more POWER. It needs more ENERGY.

    Pumped hydro does not produce energy – it consumes energy.

    There are plenty of good pumped hydro sites on the mainland that are at a competitive advantage to Tasmania because they do not have the AC-DC-AC energy losses twice (once southbound, once northbound).

    This is just PR spin appealing to Tasmanians’ obsession with megaprojects.

    • Steve159 1 year ago

      I started to read you comment, and remembered my school physics, power = energy x time. i.e. energy = power/time

      So what are you saying, Tasmania needs more time, less time?

      As for losses, who cares, when you have a free resource, wind. Just over-build capacity.

      Likely the rest of your post makes about as much sense.

      • Tom 1 year ago

        You’ve got it backwards. Energy =power X time. Power = energy/time. Now things might start making more sense?

        Who cares when you’ve got a free resource? How about $1.5 billion + wasted on flooding the Borradaile Plains, building about 6km of dam walls and 6+ km of tunnels through quartzite bedrock, plus $1.1 billion + on a second Basslink, when they’d both be completely under-utilised and out-competed by mainland schemes.

        • RobertO 1 year ago

          Hi Tom, Wind in the south and solar in the north are both fuel for free and if we get enough of them they will drive the wholesale price down and when they do then prices for us households will finally start to drop. With pump hydro if you are using cheap almost free energy to do the work and can then sell it at higher price. If you own either the wind/hydro or solar/hydro you get to chose when you sell on the wholesale market. Even a 20% loss in effect price of $0 (because you curtailed) of PH is better to sell later in the day. Most PH will be smaller in size, about 25% to 75% of the wind farm /solar capacity factor x name plate eg a 100 MW farm at 34% will have about 9 to 27 MW PH It just an engineering issue of how to handle the output of the wind/solar farm relating to the sale and the timeframe to provide best prices if you merchant priced.

          • Tom 1 year ago

            True that the fuel is free, but the capital cost of the pumped hydro is not, and you’d have to make that back.

            If you can envision a future in which the wholesale price of energy spends 20% of its time below $20/MWh, then that’s great. I think it will spend some time very low, but not that much.

            The more wind that is built, especially in SE Australia, the more often the power produced by the wind turbines will be sold into an oversupplied grid. This will make the relative economics for new wind less attractive. Same goes for PV, although PV has a lot of catching up to do compared with wind.

            Pumped hydro enterprises (whether private stand-alone, private and coupled to a wind farm, or government) can’t just wait until energy is ultra-cheap to pump. If they did, then they would make really good margins on their trades, but they won’t make enough trades to pay off their capital (or the interest on their borrowings).

            This is where buying when energy is cheap-ish and selling when it is expensive-ish comes into play – pumped hydro enterprises are going to need to make a lot of profitable trades, not just a few highly profitable trades.

            And with these ones, round-cycle efficiency is going to be really important. When Victoria as a round-cycle efficiency of 80% and Tasmania (trading Victorian energy) has a round-cycle efficiency of 64% because of 10% lost each way through Basslink, it’s going to put us (Tassie) way behind.

          • Mike Westerman 1 year ago

            Tom we are never going to have an oversupply of solar at 6pm. And we have to look at statistics as to whether we have an oversupply of wind at that time. We are highly likely to have an oversupply of solar and/or wind during the day in both Tas and Vic in the future, with the solar oversupply driven from behind the meter as we are already seeing in SA. This and the need for FCAS and reserve/black start make PHES attractive, Tas may well be a different market for PHES than SA which is likely to be on a daily cycle. PHES in Tas will probably end up being used for peaking to reduce storage schemes from having to run but longer than daily cycle schemes would also seem likely. I’d love to have time to do more than just thought experiment numbers but I’m sure that is what HydroTas is doing now.

          • Ian 1 year ago

            Hard to know the best way to go regarding developing storage resources. Besides the efficiency issues, there is also the question of the purpose of storage. The most economical storage, at first glance, seems to be daily demand/supply matching and time shifting of energy resources. The most expensive form of storage is high volume/ long term storage, ie storage required to last days and provide most of the grid’s generating capacity for extended periods, but only very occasionally. An analogy would be a casual worker on standby vs a full-time employee with guaranteed employment. I cannot see Tasmania being the benevolent storage of last resort, hardly included in the day to day commerce of electricity trading but expected to carry the nation when local resources are scarce! That is what “battery of the nation” implies.

          • RobertO 1 year ago

            Hi Tom, also add in EV with batteries, heavy transport with it H2 needs, public transport trains including long distance. The problem with chemical batteries is the life cycle is 10 to 15 years at the most and PH is 50 + years. Both wind and solar will be curtailed (not allowed on on the network all the time and storage will help them cope). More and more manufacturing will move to towards cheaper energy prices (both supply your own or from anothe party). Long term storage (H2O) may be paid for via a capacity arrangement. Wholesale price is only what Gas/Coal/Hydro can get away with, at the moment is is about $100 per MWh which is 10 cents per KWh retail (transmission plus retails costs and us consumers are paying 30 cents per KWH). More competition will drive the price downwards.

          • Tom 1 year ago

            You’ve sort of got two different topics there – power oversupply (curtailment), and power undersupply (dispatchable generation including storage release).

            Since you mention EVs and hydrogen, wouldn’t it be far cheaper infrastructure-wise to use demand management to charge the EVs at a cheaper rate (unless they were going to fully charge anyway) and produce more hydrogen when there is a power surplus? Then demand would rise to meet production.

            In Tassie, hydro supplies just over 3/4 of our energy needs including transmission & distribution losses. Even at a capacity factor of 35%, we don’t need to overbuild our wind capacity to much more than our instantaneous demand to supply the other 1/4 of our energy needs. The only times that significant amounts of energy would be wasted is when lots of our run-of-the-river dams are spilling (which averages about 8 weeks per year) plus our wind or PV generators are generating at close to capacity.

            So not much energy is going to be wasted in Tassie anyway. Not enough to justify billion dollar projects to capture it.

            Regarding power shortages requiring dispatchable power – as long as we (Tasmania) keeps water in our dams we won’t have a problem. That’s a mainland problem. Tassie’s issue is a potential energy shortage, not a potential power shortage.

            A second Basslink would actually benefit Victoria much more than it would benefit Tasmania – it would effectively be another 500MW “peaking” plant, and could be what keeps the lights on during those summer heatwave evening demand spikes. (Admittedly Tassie would have to increase power generation capacity a little bit to supply two Basslinks on full export, but this could easily be done by adding new generators to existing dams).

          • Mike Shackleton 1 year ago

            I wish people would better understand the life cycles of solar and batteries. Batteries degrade yes, but they don’t all degrade at the same rate, and they aren’t completely useless at the 10 year mark. All you do is add additional units to make up for the loss in capacity through degradation. By the time additional units are required, the cost of new units will be greatly reduced. Same goes for solar panels. After 20 years they are still working, albeit at a reduced capacity. Some will have experienced a lot of degradation, others very little. So you only replace those units that have failed entirely. Even pumped hydro needs ongoing maintenance and parts replacement – nothing is 100% maintenance free.

          • Ian 1 year ago

            All resources are for free, even coal and oil, you just have to extract them, process them, transport them etc. Tom is right, it’s the little step from capturing the resource to using it that’s the expensive bit;)

          • Brian Tehan 1 year ago

            I don’t follow your logic. Coal and oil have a price on the open market. The only fossil fuel that you could argue is “free” is brown coal, except even that has a price for remediating the mines, not to mention the health of those living near them – and there should be a carbon price on it as well, obviously. Wind are sun are truly free with no price on the fuel – it can’t be traded.

          • Ian 1 year ago

            See the emoticon at the end of my comment. Oil and coal are resources buried underground . To humanity as a whole they are as free as the sun and the wind . It’s the haggling over ownership of the resource and extracting it that is not free, just as is the case with wind and solar. See my point? No . Well never mind .

        • Steve159 1 year ago

          I was thinking in electrical terms that power = Potential Energy (V) x I, so my bad, I guess. But it’s irrelevant anyway. It’s still a time-related issue (per the equation), which you haven’t addressed.

          As others have explained, we simply build excess wind capacity with pumped hydro, and watch the $ flow in.

        • Mike Westerman 1 year ago

          It would indeed be foolish and devastating if the Borradaile Plains were flooded. Fortunately Arthur’s Lake does not require this sort of nonsense, with a lower pond on Lake River near O’Connor’s Peak. Low small dam, underground powerhouse not far from Poatina. Could be developed to 1GW.

    • Catprog 1 year ago

      Build lots of wind in Tas and they only send the power north.

      • Daniel Boon 1 year ago

        they don’t

    • Mike Westerman 1 year ago

      Tom a bit of an OTT response. Tas needs income. It can get that by building more wind farms plus PHES and selling firm power to Vic. It has Australia’s best wind resources, so there is no need for continuing southbound imports from lignite plants that will soon close. That way Tas gets more energy and more state income. Vic is not a great place for PHES except up towards the alps where environmental considerations make it tough. Plus it has a lot of money needed to remove transmission constraints.

      • Tom 1 year ago

        Totally agree with Tassie building more wind (and large scale PV), disagree that pumped hydro or a second Basslink are going to be sufficiently economical to build until we’ve got around 1500MW of wind AND 1500MW of PV installed. We’ve got 300MW of wind at the moment.

        Victoria has excellent pumped hydro sites on the sides of Thompson reservoir – relatively cheap to build (little or no tunnelling), and efficient (700-800m head and only 3 or 4km from Lake Thompson.) They’d only need 50km of transmission line to join them to their existing high-power transmission infrastructure in the Latrobe Valley. Once at Morwell there would be no transmission constraints – those lines can handle gigawatts.

        Pumped hydro here would seriously out-compete pumped hydro in Tassie when trading with the Victorian market – they would be able to buy energy at a higher price and sell at a lower price than in Tassie and still be more profitable due to their reduced cycle energy losses.

    • WR 1 year ago

      Tom’s point is very valid. Tasmania doesn’t need pumped hydro in order to store more energy for Tasmania. Because their existing hydro already provides a large amount of stored energy and dispatchable power, they only need some additional wind/solar generation to provide the energy they need to achieve 100% RE locally.

      The proposal to install more pumped hydro only makes ‘energy sense’ if the power/energy is going to be exported to Victoria. So people should be asking if this is the most economical way of providing extra power/energy to Victoria or if there are cheaper solutions closer to home.

      • Daniel Boon 1 year ago

        it’s to make Hydro Tasmania’s board bonuses (on the backs of consumers)

    • Daniel Boon 1 year ago

      nail on the head Tom.
      I went with a proposal of 100MW of solar farm on Tassie

  5. Peter F 1 year ago

    There is some sense in upgrading the peak capacity of the hydro system. Modern variable speed turbines can deliver 5-20% more power from the same civil works (dams tunnels etc) If Tasmania builds 300-400MW of new wind it will then generate enough energy annually to be a net exporter. If it had slightly more peak hydro it could supply its own peak demand + exports.
    Additional resources beyond that such as the proposed pumped hydro schemes would require the duplication of basslink and it is very hard to see how the cost of pumped hydro in Tassie + Basslink + on land transmission upgrades on both sides could compete with pumped hydro in the ranges north of Gippsland

    • Richard 1 year ago

      Have they got the dams in Gippsland and the hydro infrastructure? Tassie also has a very reliable rainfall. Many factors to consider.
      Also, if pumped hydro is by far the cheapest form of storage then will need all the pumped hydro we can get.

      • solarguy 1 year ago

        I agree Richard. Tassie has great wind resources and that should be developed bigtime and within reason of cost effectiveness PHES there. As their wind is so good it can be transmitted to the main land where PHES can be developed perhaps cheaper.

        Andrew Blakers, said we need 450GWh of storage, but what’s been mentioned in this article is only 2.5GWh in Tassie.

        • Richard 1 year ago

          Difficult to say how it will all play out. These musings are probably already out of date.
          The improvements in solar, wind, battery storage and renewable technology, et al, are proceeding so fast it’s impossible to predict where we will be in ten or twenty years, from a market point of view. Which makes it very difficult for investors.

          The energy market as it exists today is a place for risk takers and visionaries. But renewable energy companies and people playing in that space for some time who have developed real world experience
          are probably the best placed to take advantage long term.

          The only certainty is that coal is dead!

          • Daniel Boon 1 year ago

            Hydro Tasmania doesn’t want solar on the island

          • Richard 1 year ago

            Not much they can do about that. Solar and battery is starting to get cheap. Batteries are going to get really cheap over the next ten years.
            Everyone will go solar and battery.

      • Daniel Boon 1 year ago

        about 12 months ago, in their efforts to ensure big bonuses, they pumped the dam dry, burnt the extension cord to mainland Australia and spent $40 million on diesel generators and about $11 million on diesel fuel … expecting the usual rainfall

        • Miles Harding 1 year ago

          This should be read as karma in kind for the games of greed played by hydro tasmania – they sold all the water reserves (electricty) during the period of the carbon proce, then got hit by a drought and … yes … burnt the extension cord.

          Building wind and pumping and preserving the hydro resource makes very good sense and it’s what they should have been doing instead of pocketing the windfall from the carbon price.

          Hydro tasmania’s judgement is not to be trusted and their plans need to be tested for sense and sanity.

    • Daniel Boon 1 year ago

      unless, of course, political decisions come into play … very lucrative to be on board of Hydro Tasmania

  6. Mathew 1 year ago

    I love this site but why is it that most of the pictures and graphs are of such poor quality/size that the text on them is not legible. If it’s server constraints could you link to the originals please.

  7. Michael Murray 1 year ago
    • Michael Murray 1 year ago

      OK looking at the map more carefully it’s unrelated. I’ll just have to continue to rely on my wife telling me what it was like 🙁

      • Richard 1 year ago

        It’s going to be drained within the next thirty years is my prediction!

        • Michael Murray 1 year ago

          How long would it take to drain once they started ?

          • Richard 1 year ago

            No idea!

  8. Richard 1 year ago

    The real problem with all this is state politics and power monopolies. Mainland power companies are not going to want power coming from Tasmania competing in their market. They wold prefer to be sending power the other way!
    Unfortunately Tassie isn’t big enough to have any clout and there is no overarching national renewable energy policy directing things, so they will just get shafted like they usually do.

    • solarguy 1 year ago

      Really Richard, think about that some more. Look at the wind potential…..um.

      • Richard 1 year ago

        Wind blows strongly in Victoria and South Australia, in the South. Off shore wind potential in those states hasn’t been tapped either!

        In terms of economics, is it worth putting in the power cables and attendant losses v improved wind resource coupled with as yet not built local pumped hydro?

        And! We have every man and his dog putting in solar and now batteries, which are only going to get massively cheaper going forward. There might not even be a market for this boondoggle idea/same for Snowy Hydro.

        Add in some more confusion… We now have new base load power being built from solar/molten salt technology in SA at prices way under anything on the market for technology still in it’s infancy.

        Tassie will never make money exporting renewable energy to the mainland
        long term! The fact that Tassie is nearly 100% renewable now is brilliant and Tassie should be shouting it from the roof tops! Why are they hiding their light under a bushel!

        • solarguy 1 year ago

          Whether it will be economical or not remains to be seen, but as Tassie has the best wind resource, it may just turn out that wind is worth developing fully there. After all Tassie is 40.77 – 43.58 south and when there is no wind anywhere else or not much, Tassie might just have plenty.

  9. Miles Harding 1 year ago

    Tasmana is a very windy place and I would question the need for all that pumped hydro without first seeing the impact of new wind (and solar) preserving the existing naturally charged head waters.

    Studies that focus on power stations and output capacity are fundamentally biased and won’t answer the important whole of system questions.

  10. Richie 1 year ago

    I re-read this article looking for the one word which justifies pumped hydro and failed to find it. Wind. What is the point of pumped hydro without a source of energy to power it? Tasmania needs to invest in more wind farms concurrently with storage. They look woefully poor in wind utilisation to date imho.

    • Mike Westerman 1 year ago

      Dead right!

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