Government priorities


Pumped hydro

Energy storage is an increasingly important part of our electricity system as it allows us to ensure energy is always available even when the sun and wind are not. Pumped hydro is the most common and most mature form of this energy storage.

Dispatchable power can be added into the market to balance electricity supply and demand. Pumped hydro, including Snowy 2.0 and Battery of the Nation, can help us deliver a more reliable energy system, reducing the risk of blackouts and electricity price volatility.

The Australian Government is making targeted investments to help realise the significant potential that pumped hydro has to deliver additional electricity generation and much needed energy storage to the National Electricity Market. The Australian Government is supporting pumped hydro through:

  • providing additional equity to Snowy Hydro Limited to construct Snowy 2.0
  • partnering with the Tasmanian Government to expedite the 1200 megawatt second Tasmanian interconnector, known as Marinus Link, through to a final investment decision by 2021–22
  • committing to develop an underwriting mechanism for the Battery of the Nation project through the Underwriting New Generation Investments program

How pumped hydro works

Pumped hydroelectricity schemes is a flexible way of managing our demand for electricity. In conventional hydroelectricity generation, water flows from a dam or reservoir where it has been stored and is then channelled through rotating turbines: these turbines then generate power.

Pumped hydro operates on the same principle except that 2 dams, 1 higher than the other, work in a cycle that pumps water into the upper reservoir during off-peak hours. Potential energy is then stored and generated when it’s needed.

For example, when prices are cheap but demand is low, water in the low reservoir is pumped to the higher reservoir until it is needed for generation.

When both prices and demand are high, the water is released back into the lower reservoir—gravity does much of the work, so this energy production is cheap and efficient.

Snowy 2.0

Snowy 2.0 will expand the original Snowy Mountains Hydroelectric Scheme with an additional 2000MW of electricity generation capacity and 350,000MW hours of energy storage. Creating up to 5000 jobs and producing enough power for 500,000 homes, it will link the Tantangara and Talbingo reservoirs with a 27km tunnel and a new power station that will be around 1km underground.

Snowy 2.0 is critical to the future security and reliability of our energy system and will put downward pressure on electricity prices through providing much needed dispatchable generation capacity and energy storage, reducing our reliance on more expensive forms of generation.

Snowy 2.0 represents the largest energy storage project in the southern hemisphere and the largest renewable energy project in Australia.

On 26 February 2019, the Australian Government announced shareholder approval of the Snowy Hydro Limited Board’s final investment decision to build Snowy 2.0 subject to environmental approvals. Following approval under both NSW and Commonwealth environmental laws, on 28 August 2020 the Government provided its shareholder approval to Snowy Hydro Limited Board to issue its notice to proceed with the main works for the project.

The iconic Snowy Scheme already plays a critical role in ensuring system stability at times of peak demand by providing more than 4000MW of existing fast start dispatchable generation capacity. Snowy 2.0 will increase this capacity by 50% to 6100MW. First power is expected from Snowy 2.0 in mid-2025.

More information about Snowy 2.0 is available on the snowyhydro website.

Battery of the Nation and Marinus Link

Battery of the Nation is a Hydro Tasmania initiative to investigate and develop a pathway of future development opportunities in wind and hydropower for Tasmania to make a greater contribution to the National Electricity Market. The project will deliver up to 2500MW of pumped hydro, more than doubling Tasmania’s generation capacity, and offer major new energy storage resource to firm developing renewable generation.

To realise the full potential of Battery of the Nation additional electrical connection between Tasmania and the mainland is needed. The Marinus Link is a 1200MW Bass Strait interconnector that will be vital for securing the reliability and affordability of Australia’s future electricity grid.

Marinus Link will allow over 400MW of existing dispatchable generation to be transmitted to the mainland, which, due to limited BassLink capacity, is currently unavailable. This is enough to power up to 400,000 homes. It will also provide extra export capacity, supporting new investment in Battery of the Nation projects which would enable additional generation to be delivered to the mainland when required.

More information

Snowy 2.0 snowyhydro

Snowy 2.0 factsheet 

Snowy 2.0 video Australian Government

Battery of the Nation and Project Marinus factsheet

Battery of the Nation Hydro Tasmania

Project Marinus ARENA and TasNetworks

ANU finds 22,000 potential pumped hydro sites ARENA 

National Electricity Market 

Underwriting New Generation Investments program 

Climate Solutions Package Australian Government