| Pumped storage
dams across the state, started calling for expressions of interest to establish pumped storage schemes adjacent to them. Turnbull explained that there are hundreds of
potential locations including in areas where coal fired generation and mining is going to close. Whether it is Australia’s Hunter Valley or America’s West Virginia, pumped storage can provide new clean energy jobs for communities where coal is shutting down. And most importantly it can do so in locations which take advantage of existing transmission. Water NSW was overwhelmed with the level
of interest shown by developers. Almost all of the proposals involved building turkey’s nest dams on top of a hill adjacent to the dam, many involved very little tunnelling and as closed loop systems they have minimal environmental impact. However, financiers were still holding back – they understood the many revenues that could be derived from pumped storage – arbitrage, grid stability, frequency maintenance and so on. But it was easier, they said, to see the business case for batteries with only a few hours storage; ideal to take advantage of the early evening peak demand spike. But the NSW Government advised by AEMO recognised that long duration storage of eight hours plus was going to be needed – especially in a world without continuous thermal generation. Turnbull explained that as part of the state’s energy
roadmap, Energy Minister Matt Kean has proposed long term energy supply agreements which would see the state grant a series of options to the developer of long duration storage (eight hours plus), which would almost certainly be a pumped storage project. The state will be required to guarantee a level of income to the project which is not referenced to a price per MWh delivered or stored. Revenues actually received would be offset against the guaranteed amount. Projects which were net recipients of state support when options were exercised would have to share future revenues which exceed a revenue threshold. These options will be granted in a competitive process – those seeking the least support for the longest duration capacity will be preferred. This scheme, still in development and to be finalised by the end of 2022, is not like a contract for difference or a floor price for energy. And, Turnbull added, that
makes sense when we talk about storage, because the policy objective is not to secure the generation and despatch of renewable electricity, but rather to make sure there is a quantity of stored electricity able to be despatched as and when required. This storage proposal will deliver, at least cost
to NSW electricity customers, the amount of long duration storage the system will need. It has the potential to essentially underwrite a level of income for a project that would cover all or much of the project’s debt financing obligations.
Call to action Turnbull also co-chairs the International Forum on
Pumped Storage Hydropower which is a collaboration between the International Hydropower Association and the US Department of Energy. The forum has identified that the sector’s single greatest challenge is securing financing for pumped storage in a rapidly changing and hence uncertain energy transition. “All too often people say…. ‘its too expensive’ which begs the question of how you otherwise keep the lights on overnight without burning fossil fuels? And if you think pumped storage is expensive,” Turnbull said, “how about nuclear?” Turnbull concluded with three observations:
1. The first is a penetrating glimpse of the obvious. We have to stop burning coal and gas. We have the renewables to generate unlimited power, but it is intermittent. To make it reliable we need long duration storage and the best solution to that end is pumped storage.
2. The second is that we need to get cracking and build it. Not just because it takes more time than building a solar farm but because we need to show it can be done repeatedly and at reasonable cost. Seeing will be believing. There was a time when people didn’t believe solar PV would work at scale either.
3. And the third is a call to action. We have to put this issue on the agenda everywhere. Advocacy is needed now more than ever. “Without pumped storage, the energy transition is in danger of stalling just as it should be accelerating,” Turnbull warned. “The energy transition, the achievement of net zero, containing global warming to two degrees all depends on it, depends, in other words, on us.” ●
Below: The Tarraleah scheme in the Central Highlands of Tasmania, Australia was commissioned in the 1930s and produces around 630GWh of energy each year - or 6.5% of Hydro Tasmania’s total production. In April 2022, the federal government announced a funding commitment of A$65M to help develop the scheme and enable upgrade works to provide greater future flexibility
Pumped storage delegation
How to accelerate the development of pumped storage hydropower capacity was the focus of a meeting between the International Hydropower Association (IHA) and David Malpass, President of the World Bank, in Washington D.C. during April 2022. IHA Board Member Malcolm Turnbull and Eddie Rich, Chief Executive of IHA, also met with representatives from the International Finance Corporation, the Inter-American Development Bank, the US Department of Energy and the Bezos Earth Fund. “The global decision-makers we spoke to acknowledged that the existential challenges of climate change could not be addressed without a huge increase in sustainable hydropower, alongside wind, solar and green hydrogen. We agreed to work together on improving awareness of this and the policies to enable it,” Eddie Rich said.
Above: Malcolm Turnbull, President of the World Bank David Malpass, IHA Chief Executive Eddie Rich, IHA Climate Policy Manager Debbie Gray and IHA Head of Research and policy Alex Campbell
www.waterpowermagazine.com | July 2022 | 15
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