Prime Minister Malcolm Turnbull may be about to “drive a stake through the heart of the fossil fuel generation industry in Australia” with a decision to fund a two-gigawatt, A$2-billion pumped storage scheme in the Snowy Mountains in New South Wales.
“By promoting pumped hydro, Turnbull is effectively [sounding] the death knell for any new coal- or gas-fired generation built by the private sector, and is paving the way for a 100% renewable energy grid, driven mostly by wind and solar,” RenewEconomy reports. The move “also makes a reported and belated push for nuclear energy from members of his Coalition entirely redundant, because it would remove the need to rely on baseload generation over the medium to long term.”
A final decision on the scheme will hinge on a feasibility study by the Australian Renewable Energy Agency and funding from the federal, New South Wales, and Victoria governments.
“Assuming this does go ahead at the scale advertised, the conversation around energy delivery will now shift from ‘baseload’ to flexibility, and gas and coal will no longer be able to compete, on either cost or utility, over the medium to long term,” notes RenewEconomy’s Giles Parkinson. “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.”
Last month, Prof. Andrew Blakers, foundation director at Australian National University’s Centre for Sustainable Energy Systems, calculated that a mix of solar, wind, and pumped hydro could bring the country to 100% renewable energy at a cost of $75 per megawatt-hour, less than the current wholesale price for power. He told Parkinson the latest project in the Snowy Mountains—where Australia already has 2 GW of pumped storage in operation—would get the country more than half-way to a grid run entirely on solar and wind.
“A 100% renewable energy grid will require around 450 gigawatt-hours of storage,” he said. “Pumped hydro is by far the cheapest in the wholesale market,” although about half of the total would have to come from behind-the-meter batteries and demand management.
With Turnbull’s announcement this week, however, “it’s game over for gas, it’s game over for nuclear. Solar PV and wind have won the race,” Blakers said. The project could also be a challenge for solar thermal and storage technologies, except in locations that are unsuitable for pumped storage.