Wedoany.com Report on Feb 26th, Recently, the New South Wales government announced it has granted priority planning status to two pumped hydro projects with a total capacity of 1.8 gigawatts, aiming to accelerate assessment processes, enhance grid reliability, and promote the transition to renewable energy. These pumped hydro projects include Zen Energy's A$3.5 billion Western Sydney project at Lake Burragorang and Acen Australia's A$3.6 billion Phoenix project near Mudgee, both designated as Critical State Significant Infrastructure.
NSW Energy Minister Penny Sharpe noted that these two projects are still in early planning stages, requiring further assessment and community consultation, but this announcement highlights their strategic importance. She stated, "These projects will help stabilize the grid, support energy reliability during peak demand periods, and drive the transition away from coal-fired power." Although battery technology is more favored in Australia's energy transition, and pumped hydro faces challenges of high upfront costs and complex construction, the state government still views it as crucial for long-term energy storage.
The development of pumped hydro in Australia has not been smooth sailing. For example, the Snowy 2.0 project, launched in 2017, has seen costs surge from A$2 billion to over A$12 billion, with its completion delayed until 2028. Despite this, Sharpe emphasized, "Long-duration storage like pumped hydro is essential for building a modern energy system that works for NSW households, businesses, and industries." This reflects the government's continued support for pumped hydro projects.
Acen Australia Managing Director David Pollington believes that the project's designation as Critical State Significant Infrastructure is a significant advancement for pumped hydro technology, reflecting its designed role in the National Electricity Market. He said, "The Phoenix project provides that kind of bankable critical infrastructure that underpins a growing energy system, supports new renewable generation, smooths wholesale energy price volatility, and unlocks opportunities across the grid." This project is the first pumped hydro project under the NSW Electricity Infrastructure Roadmap to secure a Long-Term Energy Service Agreement, with a capacity of 800 megawatts and 15 hours of storage duration.
Zen Energy's Western Sydney project has a capacity of 1 gigawatt and 16 hours of storage duration. NSW Planning Minister Paul Scully stated that these pumped hydro projects are key to stabilizing the energy system and achieving a low-emissions future. He said, "These two pumped hydro projects could play a crucial role in supporting our energy security, capable of generating enough energy during peak demand periods to power all households in the entire Greater Perth area." Obtaining priority status will streamline the approval process, but the projects still require comprehensive assessment and community engagement.
Zen Energy expects construction to begin in 2027, with operations starting in 2031; Acen plans to start the Phoenix project in 2028, with completion in 2032. NSW aims to add 16 gigawatts of renewable generation by 2030 and 42 gigawatt-hours of long-duration storage infrastructure by 2034, with pumped hydro projects playing a significant role in this process.
