Can investment in pumped hydro make Tasmania the “battery of Australia”?

Posted 27 April 2017

Pumped hydro facilityA Federal Government study into expanding the Tasmanian pumped hydro system to serve as the “battery of Australia” is being met with some scepticism.

Prime Minister Malcolm Turnbull announced a $2.5 million feasibility study to assess several new pumped hydro energy storage schemes that could double the capacity of Hydro Tasmania.

“There is an opportunity here for Tasmania to play an even bigger part in ensuring that Australians have reliable and affordable energy and, of course, that we meet our emissions reduction targets,” Turnbull said. 

The study will determine the feasibility of four large projects: Mersey Forth-1, Mersey Forth-2, Great Lake and Lake Burbury. Each has a capacity of between 500MW to 700MW. 

The study, to be carried out by the Australian Renewable Energy Agency (ARENA) and Hydro Tasmania, will also consider an alternative of nine small scale sites totalling 500MW, as well as the expansion of the Tarraleah and Gordon Power Stations.

Turnbull said that by delivering up to 2500MW of storage capacity for the National Electricity Market, the expansion could see Tasmania serve as a “battery for Australia”.

“What we're seeing across the electricity market is traditional thermal power stations, base load power stations running 24 hours a day, and generating power in the middle of the night when there is not a lot of demand,” he said. 

“You've also got wind farms generating a lot of power in the middle of the night, and sometimes in a state like South Australia, where they have a lot of wind, the price can actually go into negative territory because there is so much energy being generated by wind.

“This is where pumped hydro can constitute a very good base load customer ... What that would enable Hydro Tasmania to do with the pump storage capacity is when energy is cheap, it’s literally just to pump it back up the hill.”

But environmental educator and member of the Climate Tasmania advisory body Chris Harries has raised concerns about the proposal.

“A hotted-up Tasmanian power system would not generate any more hydro renewable energy than it does; it would simply be turned into a buffer, importing power so as to release it later on at peak times,” he wrote in an opinion piece.

“It’s a way of storing coal-fired power but labelling it as clean hydro power. In the absence of truly massive investment in renewable energy generation, there is no way the Snowy and Tasmanian hydro electric systems can absorb the amounts of power being purported unless that power is coal generated.”

The feasibility study announcement coincided with the release of a study into building a second electricity cable (2IC) linking Tasmania with the mainland.

The report by Dr John Tamblyn found there were limited scenarios where a second cable – costing $1 billion in capital and $16.7 million in annual operation and maintenance costs – would be commercially viable.

“While a 2IC would be capable of delivering material benefits to the NEM and Tasmania, those benefits would need to outweigh the substantial capital and operating costs by a significant margin,” Tamblyn said.

But CEO of Hydro Tasmania Steve Davy said “to fully utilise that extra hydro capacity, we would require more connection with the mainland”.