Malcolm Turnbull has announced federal government plans to spend $2 billion on a 2GW pumped hydro scheme in New South Wales’ Snowy Mountains, in what could be the most significant intervention in Australia’s energy markets in half a century.
The proposal – which is subject to a feasibility study and funding agreements from Snowy Hydro’s three government owners (federal, NSW, and Victoria) – effectively signs the death knell for any new coal or gas fired generation built by the private sector, and paves the way for a 100 per cent renewable energy grid.
Indeed, the biggest beneficiary of this push into pumped hydro could well be solar PV and wind energy, which are now the clear leaders in energy costs, with further sharp falls ahead.
And new generation is needed to replace ageing coal and gas generators, and meet new demand from growing population and electric vehicles.
By adding pumped hydro, and distributed battery storage (in homes, buildings and in EVs), Australia can reach a 100 per cent renewable energy target, possibly within a few decades.
The ANU’s Andrew Blakers, who last month released an analysis that showed Australia could reach 100 per cent renewable energy with solar, wind and pumped hydro, at a cost of around $75/MWh – cheaper than current wholesale prices – describes the move as a game changer.
He estimates that once this scheme is completed, Australia will be nearly half way to having enough pumped hydro and other storage to support a wind and solar grid.
“A 100 per cent renewable energy grid will require around 450GWh of storage,”
“It’s game over for gas, it’s game over for nuclear. Solar PV and wind have won the race,” Blakers said. It also makes life difficult for proposed solar thermal and storage technologies, unless they can compete in areas unsuitable for pumped hydro.
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