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 1500MW second Tasmanian interconnector, known as Marinus Link, through to a final investment decision by 2024
- 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 are 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 two dams, one 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 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 the Marinus Link Interconnector
Battery of the Nation
Battery of the Nation is a Hydro Tasmania initiative to expand Tasmania’s renewable electricity generation capacity to supply mainland Australia. The project includes hydropower system improvements and new pumped hydro opportunities.
The Australian Government provided $2.5 million, through the Australian Renewable Energy Agency (ARENA), to jointly fund a study with Hydro Tasmania to identify cost-competitive pumped hydro opportunities from a list of 14 potential projects. The Tasmanian Government committed a further $30 million to take three of the most promising of the 14 sites, at Lake Cethana, Lake Rowallan and Tribute, through feasibility studies.
The Australian Government has committed to develop an underwriting mechanism for the Battery of the Nation through the Underwriting New Generation Investments (UNGI) program. Support through the UNGI program will secure reliable generation, increase competition and drive down prices.
To realise the full potential of Battery of the Nation, additional interconnection through Marinus Link between Tasmania and the mainland would be required.
Marinus Link is the proposed second interconnector providing an additional 1500MW of capacity between Tasmania and the mainland. It will take advantage of Tasmania’s extensive renewable energy resources. On 15 December 2020, the Australian and Tasmanian governments signed the Bilateral Energy and Emissions Reduction Agreement in which the governments agree to support the design and approvals phase of the Marinus Link project.
Under the agreement, the Commonwealth will contribute a further $93.9 million in addition to the $56 million already committed. These funds will progress the Marinus Link project towards a financial investment decision in 2024.
When constructed, Marinus Link will allow over 400 MW of existing dispatchable generation to be transmitted to Victoria, which, due to limited BassLink capacity, is currently unavailable. This would power up to 400,000 homes and help manage the impact of variable wind and solar, unplanned outages and extreme weather events. The link will also enable expansion of Tasmania’s hydro capacity through Battery of the Nation. This will unlock additional renewable energy investment in the state.
Marinus Link is expected to create up to 2800 direct and indirect jobs during construction and deliver up to $2.9 billion of economic stimulus to north-western Tasmania and regional Victoria.
Snowy 2.0 snowyhydro
Snowy 2.0 video Australian Government
Battery of the Nation Hydro Tasmania
Project Marinus ARENA and TasNetworks
Climate Solutions Package Australian Government