Pumped hydro is key to the long-term sustainability of Australia’s future energy market, a new report details.
Energy market analysts RepuTex say that the government’s planned extension of the coal-fired Liddell Power Plant in New South Wales is likely to increase power prices while scaled-up progress on pumped hydro facilities could lower energy costs.
Pumped Hydro would see gas and coal displaced from within the National Energy Market if gas prices continued to rise, RepuTex head of research Bret Harper said.
"Critically, pumped hydro could serve as a lower cost substitute for gas, while complementing future low-cost renewable energy with greater dispatchable capacity, rather displacing new investment,” he said.
“If gas prices come down, it could lower electricity prices and tip the scales toward more gas generation, however, rising gas prices – and high electricity prices – is likely to continue to accelerate the search for alternatives.”
Pumped hydro allows for clean energy, generated from wind and solar for instance, to be stored for long periods of time and released when energy demand increases.
It works by pumping water from existing dams into storages so the same water can be used again to create energy.
Hydro Tasmania is priming itself to be a centre for the nation’s pumped hydro storage through its Battery of the Nation plan.
Project director Chris Gwynne said Tasmania had a huge amount of untapped potential to hold the required infrastructure.
“We have the ability to install pumped hydro quickly, efficiently and cost-effectively, because of our existing hydropower system,” he said.
“Early modelling also suggests pumped hydro development could generate up to $5 billion of investment and 3,000 jobs in regional Tasmania over 10 to 15 years.
“If it’s appropriately priced, gas may well be part of the future energy mix. Pumped hydro is more than a transition technology; it’ll play a critical long-term role in the future energy market.”
Mr Gwynne said 95 per cent of the world’s energy storage was pumped hydro.