Zen inks deal with pumped hydro and hydrogen hopeful to help large energy users kick fossil habit

Sunshine Hydro, a company proposing to combine pumped hydro energy storage with green hydrogen production, has signed a memorandum of understanding with renewable energy gentailer Zen Energy, to develop a “24/7 Sustainable Energy Strategy” for large consumers in Queensland.

The agreement includes Zen providing renewable electricity to Sunshine Hydro’s green fuel facilities, and both companies using Sunshine Hydro’s advanced energy storage optimisation program, known as Aesop.

Sunshine Hydro’s Aesop software both guides the design of hybrid generation and energy storage assets – pumped hydro and big batteries – and commercial contracts to underpin them and optimises the operations and interacts with each asset’s control system.

The companies say the baseload supply in the agreement will be matched to local renewable sources “every hour of every day,” with a reliability that exceeds 98 per cent – well exceeding the availability of Australia’s current fleet of aging coal plants.

“We have worked hard to develop this innovative concept and optimisation tool that enables a bankable business case for long duration storage – which is absolutely critical for reaching the end state of fully renewable grid, where every electron comes from renewable sources,” Rick McElhinney, CEO of Sunshine Hydro said on Wednesday.

“In concrete terms, this could actually keep industry running 24 hours a day, every day of the year on 100% green energy.”

One of the key assets underpinning the plan is Sunshine Hydro’s flasgship Djandori Gung-i (Spirit in the Water) Superhybrid clean energy project at Miriam Vale, a proposal to deliver up to 600MW of pumped hydro capacity and up to 300 MW of hydrogen electrolysers.

Between Zen and Sunshine Hydro, other assets would include 11 GWh of energy storage (equivalent to 18 hours), the 300 MW electrolyser, a 220,000 tonnes a year of green methanol plant, a 50 MW peaker plant, and 1.8 GW of wind and solar power purchase agreements.

The two companies are aiming to start delivering the agreed 24/7 supply of renewable energy starting in 2031.

“This puts Australia at the forefront of an emerging market,” said Zen Energy CEO Anthony Garnaut in a statement on the MoU.

“It’s a significant announcement for new green industries that depend on a continuous supply of green energy, and is critical for enabling the green industries that will propel Australia to become a renewable energy Superpower.

Zen, in August, signed up to buy the majority of electricity produced by Enel Green Power Australia’s Quorn Park Hybrid Project, which will combine a 98MW solar farm with a 20MW, 40MWh battery around 10km north west of Parkes. The project reached financial close in July is expected to be operational in 2026.

The 10-year Power Purchase Agreement (PPA) with Enel adds a further 68MW capacity to Zen’s existing generation portfolio, which is on track to double in 2024 to 2 TWh a year.

Earlier in the year, in April, Zen unveiled plans to develop a 1GW pumped hydro project, using land that once served the New South Wales coal industry to supply up to eight hours of “firmed” renewable energy to the state’s grid as it transitions away from fossil fuels.

The announcement marked Zen’s first brownfield renewable energy development, a milestone backed by the company’s belief that pumped hydro will be an important part of the renewable energy mix, particularly as aging coal plants exit the system.