EIGHTEEN North-West and West Coast sites are being considered for pumped hydro developments.
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They are on a statewide shortlist of about 30 possible sites which will be whittled down to 10-15 in the next two to three months as Hydro Tasmania looks to potentially double its capacity.
That could create up to 3000 jobs and up to $5 billion of investment over 10-15 years, Hydro said on Friday.
Speaking near Lake Cethana, where some of the North-West's best pumped hydro potential lies, Hydro chief executive Steve Davy said pumped hydro construction could potentially start in a year or two.
Hydro is working with the Australian Renewable Energy Association (ARENA) on studies into pumped hydro.
ARENA has committed up to $2.5 million for Tasmanian Battery of the Nation program project studies.
That includes $300,000 for the initial study to prioritise pumped hydro sites and $500,000 for feasibility studies into projects at the Tarraleah and Gordon power stations aimed at increasing efficiency and reliability of supply.
Mr Davy said doubling Tasmania's renewable energy capacity would address three big challenges.
"It will lock in full energy security for Tasmania, help give Tasmanians some of the nation's cheapest power prices and give us plenty of spare energy to support mainland Australia," he said.
It will lock in full energy security for Tasmania, help give Tasmanians some of the nation's cheapest power prices and give us plenty of spare energy to support mainland Australia.
- Steve Davy
"At a time when Australia badly needs flexible and storable energy to replace the coal power it's phasing out, the Battery of the Nation offers a future that's clean, reliable and affordable."
ARENA chief executive Ivor Frischknecht said the Battery of the Nation and Snowy Hydro 2.0 studies would look into how pumped hydro could help speed Australia's transition to renewable energy.
"These feasibility studies are the first step towards significantly upgrading or replacing some of Tasmania's existing power stations and introducing pumped hydro energy storage," he said.
Pumped hydro uses surplus energy to pump water uphill for repeated generation, and is seen as a way of storing energy from intermittent renewables such as wind and solar.
"The future of the energy system is very much going to revolve around wind and solar," Mr Frischknecht said.
He said storage would become increasingly important.
Resources Minister Guy Barnett said the state government believed Battery of the Nation would deliver investment, growth and jobs, particularly in the regions.
"Tasmania does renewable energy really well," he said.
The other sites identified as having high potential for pumped hydro are in the Central Highlands and the South.