28/06/2022 - 15:40

Pumped hydro a new feature in energy mix

28/06/2022 - 15:40


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Energy storage, including pumped hydro, has become a critical ingredient in WA’s energy transition.

Pumped hydro a new feature in energy mix
David Fyfe says Synergy has been studying pumped hydro since 2018. Photo: David Henry

WHEN Premier Mark McGowan recently announced the timeline for closing coal-fired power stations in Western Australia, the biggest surprise was what comes next.

The government had already signalled that its coal-fired power plants had a limited future.

It had also pointed to greater investment in renewable energy: wind farms and solar farms.

The main surprise was just how much it planned to invest in energy storage, in particular pumped hydro, a technology that, hitherto, has not featured in WA’s energy debate.

The concept is very simple.

It uses surplus electricity during the day–when the sun is shining and the wind is blowing–to pump water uphill from one reservoir to a second.

When energy demand peaks, typically in the evening, water is released through turbines to generate more electricity.

If all goes to plan, it smooths energy generation over the course of the day and reduces the need to crank up peaking power stations.

Responsibility for this investment rests with state-owned energy utility Synergy, led by newly appointed chief executive David Fyfe.

He says WA is planning about 1,100 megawatts of energy storage, including 800MW of pumped hydro.

The balance will come from continued investment in battery storage.

Perth’s first grid-scale battery, with a capacity of 100MW, is already under construction at Kwinana, and more will follow.

In addition, Mr Fyfe said 800MW of new wind power would be installed in WA.

“This is a really pivotal moment for Synergy,” Mr Fyfe told Business News.

“It’s a really exciting transition and a fascinating challenge.” Mr Fyfe said the government’s Collie announcement followed extensive work on pumped hydro.

“We commissioned a very big study back in 2018. We think it offers a very solid solution for WA,” he said.

Synergy has moved on to study specific project options.

“There is a heap of work under way in the background,” Mr Fyfe said.

“We are looking at three or four different locations, looking at the challenges around the network and water access.”

Mr Fyfe suspects the government will not be the only investor.

“Certainly, the private sector has been looking at pumped hydro as a potential option in WA as well,” he said.

Mr Fyfe believes each of the different technologies has a role to play: batteries offer a rapid response over short periods of time, while pumped hydro can run for a longer period of time on a large scale.

“It’s good to have different types of assets performing a similar function, not to have all your eggs in one technology.”

Mr Fyfe said pumped hydro systems ranged from 400MW up to 800MW.

“We will size it appropriate to the best location,” he said.

However, Mr Fyfe was coy on where that might be, beyond saying it would be in the South West.

Collie is a logical location, as it provides an easy link to the existing electricity transmission network.

It would also provide work for some of the estimated 1,200 workers who will lose their jobs when the government shuts down the Collie and Muja power stations, between now and 2029.

That includes workers at Premier Coal, which is also likely to close when it loses its major customer.

Abandoned mine voids provide one option for the water reservoirs.

Detailed studies on preferred locations are being undertaken with the Water Corporation.

“We are partnering with Water Corp as to how we fill the upper and lower reservoirs,” Mr Fyfe said.

“There are different ways of doing it, desalination plants can play a role in this.

“You want to get as many economies of scale as you possibly can, which is why the location is important.”

Engineering consultancy GHD agrees that pumped hydro is a viable energy storage technology in WA despite the state’s flat landscape not being ideal for the technology.

Business group leader, future energy, Marcel Oosthuizen said WA did not have a choice if it wanted to facilitate further large-scale investment in renewables.

“Most other states enjoy more advantageous topographies than WA, which is likely to have a beneficial unit cost impact through economies of scale,” he said.

“However, since WA is not connected to the National Electricity Market, local large-scale storage solutions need to be explored to facilitate the transition of our energy system.

“Based on our work to date, it appears that there are viable opportunities to implement pumped hydro facilities in WA, which have the potential to provide cost effective, deep and longer capacity storage.”


Speaking in Collie earlier this month, Energy Minister Bill Johnston said the total investment in new green power infrastructure would be $3.8 billion.

As well as pumped hydro, batteries and wind farms, this included investigating the feasibility of using hydrogen in gas-fired power stations.

“In the longer term, hydrogen is expected to come down in cost and that will be important,” Mr Johnston said.

However, he made it clear where he saw more likely opportunities.

“There is a range of other technologies that are available but clearly the lowest risk option is pumped hydro, and we are confident that will work out well,” Mr Johnston said.

The minister estimated it would take up to seven years to commission the first pumped hydro project.

That included a couple of years to decide on the location and project design, two more for approvals, and then two to three years for construction.

The state government’s current stance marks a change from two years ago, when it released the Whole of System Plan (WOSP) report for the energy market.

“The WOSP modelling selects batteries as the lowest cost form of storage under all scenarios,” the report concluded.

“Other large-scale storage such as pumped hydroelectric and compressed air are considered in the modelling but are not selected as part of the lowest cost to supply under any of the scenarios.

“This is primarily due to the shorter-duration battery storage being more modular, having higher cyclic efficiency and lower cost than its longer duration counterparts.”

Mr Fyfe said one crucial factor had changed since the 2020 report.

“One of the broad assumptions was that the cost of batteries would come down over time, and that is not eventuating,” he said.

“Because the demand for batteries is so high, the cost of grid-scale storage is not coming down as expected.”

Again, he emphasised that the energy system needed a mix of technologies.

Transition map

The planned investments will accelerate the pace of change in WA’s South West Interconnected System.

Traditional power stations powered by coal and gas have a combined capacity in the SWIS of about 4,500MW (see table).

The retirement of the government’s Collie and Muja power stations will leave the state with just one coal-fired power station, the privately-owned Bluewaters, with a capacity of 416MW.

Bluewaters has not been commenting on its plans but is known to have faced some major challenges.

Its debt has been refinanced in recent years, around the same time Bluewaters was having ongoing disputes with its coal supplier, Griffin Coal, which has been incurring heavy losses.

Offsetting the gradual decline in coal has been new investment in gas-fired power and, more recently, wind and solar.

Grid-connected renewables (wind and solar) have a combined capacity of about 1,200MW.

That has rapidly been overtaken by Distributed PV, which has a combined capacity of 2,042MW, according to the Australian Energy Market Operator.

This largely comprises rooftop solar photovoltaic systems, which have a combined capacity of 2,004MW.

Added to that is ‘PV non-scheduled generation’, which comprises larger rooftop solar systems on shopping centres and commercial premises.

Distributed PV is expected to grow at an average annual rate of 7 per cent, or 238MW per year, as households continue installing rooftop solar.

AEMO estimates Distributed PV will reach an estimated 4,716MW of installed capacity by 2031-32, equal to 29.8 per cent of underlying demand.

To put this in context, the installed capacity is not the same as actual power generation.

The peak energy generation from Distributed PV was notably lower at 1,643MW, at midday on October 30 2021, according to AEMO.

Nonetheless, this figure is growing rapidly and explains why there is increasing focus on energy storage.

AEMO’s executive general manager WA and strategy, Kate Ryan, said the independent agency appreciated the early advice from the WA government about its plans.

“We will continue to work closely with the WA government, Synergy, and industry to ensure that as existing coal-fired generation is retired, new renewable generation and storage, including the announced wind generation and battery storage investments, are securely and reliably integrated into the South West Interconnected System,” she said.

Ms Ryan added that AEMO was continuing to refine its management of WA’s wholesale electricity market.

“With renewables already providing up to 78.6 per cent of power generation at any one point of time in the SWIS, AEMO is making every effort to develop tools that will enable grids that could run at times of up to 100 per cent peaks of instantaneous renewable generation by 2025,” Ms Ryan said.

Small beginnings

The public analysis of large-scale pumped hydro comes two months after the state government announced the state’s first pumped hydro system.

Western Power and private company Power Research and Development, led by former Alinta Energy executive Colin Stonehouse, have teamed up to build a 1.5MW microgrid at Walpole on WA’s south coast.

The project will use two farm dams as the water reservoirs, storing up to 30 megawatt hours (MWh) of energy.

As well as providing extra electricity during peak periods, it will supply power to the town in the event of an outage.

That is a relatively common occurrence in Walpole, which is at the end of a 125-kilometre feeder line that is exposed to disruptive elements such as animals, storms, lightning and bushfires.

The government has estimated the microgrid will mitigate up to 80 per cent of outages.

Through its Clean Energy Future Fund, the government recently awarded $2 million to support the project.

Private money

While pumped hydro is new to WA, it is already a significant feature on the east coast.

By far the biggest project is Snowy 2.0, which builds upon the historic Snowy Mountains hydro power scheme.

Championed by former prime minister Malcolm Turnbull, the project has been contentious because of its multi-billion-dollar cost and the likely environmental damage caused by building massive transmission lines between the remote project location and major population centres.

On a smaller scale is the 250MW Kidston project in Far North Queensland, being developed by ASX-listed Genex Power.

Genex describes Kidston as the first pumped hydro project in Australia for over 40 years, the first to be developed by the private sector, and the third largest electricity storage device in the country.

Alinta Energy is also seeking to develop a pumped hydro project on the east coast.

It is going through approvals for the 600MW Oven Mountain project in northern NSW.

In WA, it is investing in battery storage. It already operates a 35MW battery at Newman, in the Pilbara, and is seeking approvals to build another battery at Port Hedland, likely to be about 60MW.

Alinta is planning a larger 100MW battery at Wagerup in the South West and says the certainty provided by the government’s Collie announcement was a big positive for this project.

“We were pleased to see the government’s energy transition announcement,” managing director Jeff Dimery said.

However, Alinta remains frustrated it can’t compete for retail electricity customers.

“While we’d like to compete to deliver WA households and businesses even more affordable electricity, we think the government’s plan should strike a cost-effective balance of emissions reductions and energy security, and it sends the right signals to project developers like Alinta Energy,” Mr Dimery said.

He added the WA policy was in stark contrast with the current east coast volatility.

ATCO Australia is another private company planning further investments.

This includes a pumped hydro development planned for NSW, with a likely cost of $500 million, a power capacity of 325MW and energy storage of 2,600MWh (eight hours).

Country chair Patrick Creaghan said there had been significant commercial interest in the pumped hydro project from energy retailers looking to ensure continuity of energy delivery to customers through the transition.

ATCO also has a commercial hydrogen project on the east coast and a hydrogen blending project in the gas network in WA.

Like others in the sector, Mr Creaghan welcomed the WA government’s recent announcement.

“It aligns to ATCO’s global strategy and we’re keen to work with the WA government on potential energy storage projects in WA,” he said.

“Achieving energy demand while meeting decarbonisation goals means we need to establish an energy ecosystem that includes multiple forms of energy sources, whether it is pumped hydro storage, batteries, hydrogen or renewable natural gas.

“What is important to enable the energy transition is building capability across industry and government to ensure projects can come online efficiently and that we continue to provide safe and secure energy to meet the needs of the community.”



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