The state government will announce funding for five new pumped hydro schemes across NSW, from Illawarra to Bathurst and as far north as New England, as the national energy market operator issues a new warning that the state faces an energy shortfall.
Australian Energy Market Operator chief executive Daniel Westerman warned on Wednesday that the current list of fully funded energy projects was insufficient to replace the forecast loss of coal power over the next decade as ageing power plants are closed across the east coast.
Treasurer and Minister for Energy Matt Kean will announce on Friday that five pumped hydro projects will receive $44.8 million to fund pre-investment work such as feasibility studies.
The approved projects are in Lithgow, Yetholme, Wollomombi, Bowral and Muswellbrook, and if completed would provide a combined capacity of 1.75 gigawatts. The state government has a target to build at least 2 gigawatts of new long-duration storage, which includes pumped hydro, by 2030.
Kean said if they proceeded to construction, the projects would also create more than 2300 jobs and attract $4.4 billion of private investment.
“NSW has the most ambitious renewable energy policy in the nation, which is needed to replace ageing coal-fired power stations and build a clean energy future for NSW,” he said.
Climate Council senior researcher Tim Baxter said the outlook highlighted the need for governments to deploy clean energy solutions and accelerate projects in the pipeline, including key energy storage projects like pumped hydro.
“Pumped hydro, batteries and wind and solar have an essential role to play in ensuring the electricity grid into the future as the ageing and decrepit coal fleet comes offline … so that Australians can enjoy cheap, clean and reliable power,” Baxter said.
Kean said pumped hydro is a key component of the state’s renewable energy plans, providing clean, reliable power and creating infrastructure jobs right across regional NSW.
Pumped hydro acts like a giant battery for the electricity system. It uses surplus renewable energy to pump water up a hill when it is sunny and windy, and releases the water back down the hill through giant turbines that create electricity when it is still and dark.
Baxter added the previous federal government had been lax in management of the national grid.
“Governments are getting their skates on … but there is not a lot of room for failure from here. We need to keep the pressure on state and federal governments to make sure they deliver according to their plans. Their plans are enough, but there is a big difference between a plan and delivery,” he said.
Just months after the country’s east coast electricity market shutdown, the power grid remains fragile. Wholesale power and gas prices have been trading at far higher than average levels amid a burst of cold weather driving up demand for heating, while a series of coal-fired power plant failures have forced gas-fired generators to fill the gap.
Energy experts say it highlights the need for geographically and technologically diverse energy resources. Climate Energy Finance director Tim Buckley said this included investment in solar, wind-pumped hydro and other technologies.
“The need for the energy transition is absolutely clear and necessary, and economically logical,” he said. “The recent flooding events in Pakistan underscore the science of climate change is real and accelerating and the cost of that is extreme.”
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