The New South Wales (NSW) government has announced a AUD 44.8 million ($29.9 million) funding package for five pumped hydro projects with a combined capacity of almost 1.75 GW and 60 hours of storage. It aims to accelerate the development of long-duration storage to help manage the anticipated closure of coal-fired power plants in the coming years.
The state government said funding agreements are already in place with developers of hydro projects in the New England, Hunter Valley, Central Tablelands, Southern Highlands and South Coast regions with funds to help cover private investment barriers and upfront costs. NSW Treasurer and Energy Minister Matt Kean said the funding will go toward pre-investment activities, including feasibility studies and developing business cases for the projects.
“NSW has the most ambitious renewable energy policy in the nation, which is needed to replace ageing coal-fired power stations and build a clean energy future for NSW,” he said.
With four of the state’s five remaining coal-fired generators scheduled for retirement between 2023 and 2035, and more variable renewable energy entering the market, New South Wales has a target to build at least 2 GW of new long-duration storage by 2030 to maintain system reliability and security.
Kean said pumped hydro is a key component of the state’s renewable energy plans, providing clean, reliable power and creating infrastructure jobs right across regional New South Wales.
“If these pumped hydro projects proceed to construction, they are expected to create more than 2,300 jobs and attract AUD 4.4 billion of private investment, which will help grow the economy and support the regions,” he said.
Kean said the funding, given as part of the NSW Pumped Hydro Recoverable Grants Program, will be repaid to the government if a project reaches a financial close, and could be reinvested into future projects. Among the projects to receive grant funding is the Oven Mountain pumped hydro energy storage project being developed near Armidale in the New England region. If built it has the potential to provide 600 MW of electricity with about 12 hours of storage duration.
AGL Energy COO Markus Brokhof said the funds will enable the project to advance development studies to a stage that means the project is ready for investment.
“As we transition to more renewable energy sources, pumped hydro provides a reliable on-demand generation source and acceleration of our development studies will help us understand how the project could be delivered,” he said.
NSW has a target to build at least 2 GW of new long-duration storage by the end of the decade, and has committed AUD 97.5 million to accelerate pumped hydro projects that could meet that target. This includes funding for private projects, as well as funds to undertake site investigations for pumped hydro potential on existing WaterNSW dams.
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