Natalie Whiting* explores why the Federal and Tasmanian Governments believe two pumped hydro proposals could play a key role in Australia’s future energy solutions.
The Tasmanian and Federal Governments are pushing ahead with plans to make Prime Minister, Malcolm Turnbull’s vision of Tasmania as “the battery of the nation” a reality.
Government Ministers met at Lake Cethana in the Tasmania’s north-west last Wednesday to unveil a list of 14 sites with high potential for pumped hydro energy storage.
So what are the issues, and what is pumped hydro?
Australia’s energy future: A tale of two hydro systems
Pumped hydro systems actually use more power than they generate.
Yet they could play a key role in Australia’s future energy network.
As more coal power stations retire and more intermittent renewables enter the market, something is needed to help fill the gaps.
Energy Minister, Josh Frydenberg believes pumped hydro fits the bill.
“We need to balance out the volatility with reliable, dispatchable power and this is where pumped hydro can really make a difference,” he said.
Pumped hydro is like creating a big battery.
When there is excess power in the system, for instance on a windy night, energy is used to pump water up.
Then when there is demand for energy, the water is released.
As it falls, it turns turbines that create the power.
While several smaller pumped hydro projects are being investigated, two big plans have come to the fore: Snowy 2.0 and Tasmania’s “battery of the nation”.
Both plans build on significant hydro power infrastructure, and both are owned by Governments — Snowy by the Federal Government and Hydro Tasmania by the State Government.
Energy analyst Tony Wood from the Grattan Institute said the two projects “create a really interesting option for Australia”, as the country moves towards a new version of its energy system.
But the projects are not without issues.
Compare the pair: Snowy and Tasmania
Hydro Tasmania last week released details about the potential for pumped hydro in the State, identifying 14 possible sites across eight locations.
Snowy 2.0 is one big project — connecting its massive Talbingo Reservoir to its Tantangara Reservoir with a 27 km tunnel.
In terms of costs, Hydro Tasmania’s plan is cheaper to build.
It would cost between $1.05 and $1.5 million per megawatt to build, while Snowy 2.0 is expected to cost between $1.9 and $2.25 million per MW.
Hydro Tasmania wants to develop enough sites to produce 2,500 MW, and Snowy 2.0 would produce 2,000 MW.
However, Snowy 2.0 can store more power, with its system holding 175 hours of energy storage, while Hydro Tasmania would have between eight and 36 hours.
A big tunnel versus new dams
Mr Wood said Snowy 2.0 was further progressed in terms of technical planning.
Rock samples from along the proposed route of the tunnel are currently being tested.
The Snowy Hydro Board will make a final investment decision on the project by the end of the year, but CEO, Paul Broad said he was confident.
“This is an economic project, this is a project that works,” he said.
“Some people say, ‘Oh this is some sort of project that’s going to be funded from the taxpayer’, but it’s not.”
“It’s funded off our balance sheet.”
“We’re doing it because we believe it works.”
In the nearby town of Cooma, locals are sharing in the early confidence.
“I think everyone really believes the project will go ahead,” local publican Michael Sharkey said.
“Everyone’s just been overjoyed, basically.”
“There’s been a lot of bar talk about it, people are discussing property prices going up and just the amount of flow-on effect it’ll have on the town.”
Hydro Tasmania has the advantage of not having to build a big tunnel because of the smaller size of its proposed sites, but the sites still need to be finalised.
The smaller project will allow more flexibility but, unlike Snowy, it will require new dams.
“What’s most concerning to stakeholders is when we’re damming existing rivers, our pumped hydro projects involve utilising existing reservoirs and building new reservoirs which are off river,” the CEO of Hydro Tasmania, Steve Davy said.
How to get the power where it is needed?
There is one big hurdle in Tasmania’s plan — namely, how to get the cheap clean power to the mainland where the demand is.
Currently there is only one cable, the Bass Strait interconnector.
A second interconnector would likely cost $1 billion, and there is no word yet on who would pay for it.
Snowy Hydro has a geographic advantage in terms of accessing markets as it sits between Sydney and Melbourne, but it also needs more interconnection.
Transmission upgrades could cost an additional $2 billion.
Federal Government not playing favourites
While Snowy 2.0 has been seen as one of Mr Turnbull’s pet projects, the Federal Government said it was not playing favourites.
“They’re both important projects,” Mr Frydenberg said.
“They’re not mutually exclusive, they’re actually compatible with each other.”
With the potential of so much power to leave the system as coal-fired plants retire, Snowy Hydro and Hydro Tasmania also think both of their projects will be needed.
Mr Wood said he still wants to see further economic analysis on the projects but said both may be needed.
“So there’s a lot of uncertainty as we move into this future, but at least we can now see some real options in front of us.”
* Natalie Whiting is the Tasmanian reporter for the national 7.30 program. She tweets at @Nat_Whiting.
This article first appeared at www.abc.net.au.
