Mountains of coal dust and spoil have been removed from the former Wollondilly Coal Washery as part of remediation that will be completed as part of ZEN Energy's pumped hydro project. Images: ZEN Energy

By Paul Sheridan, Head of Strategic Communications and Public Affairs, ZEN Energy

A city should be able to keep its own lights on. If Australia is to successfully transition to a reliable supply of renewable energy, large-scale energy storage is essential.

Solar and wind can produce vast quantities of cheap power, but not all the time. Pumped hydro is critical for storing abundant renewable energy when it’s being generated and releasing it when needed.

An existing and large water reservoir that is close to electricity transmission centres, such as Lake Burragorang, is the ideal location for a pumped hydro project. In this kind of project, Lake Burragorang can serve the role of lower reservoir from which water is cycled uphill and underground to an upper reservoir to then drive water downhill to turbines to generate and supply renewable energy.

Repurposing old coal industry land

ZEN Energy’s proposed 1GW Western Sydney Pumped Hydro (WSPH) project aims to use Lake Burragorang in this way,
as well as re-purposing heavily disturbed land at a former coal washery for the upper reservoir. Utilising this site will minimise impact on native vegetation, biodiversity and cultural heritage.

Coal was mined from the Burragorang Valley from 1930 to 2000 and was delivered to the washery on the escarpment above. Since that time, rehabilitation work and reprocessing of materials has been carried out at the site. The Dunbier family own Burragorang Valley Coal – the company that has operated the site – and are partnering with ZEN Energy to turn the site’s fossil fuel past into being the state’s clean energy future.

The Enabling mine closure transitions: Opportunities for Australian industry report(1) released by CSIRO in November 2023 estimates that 240 existing mines in Australia will close by 2040, joining the thousands of retired, unrehabilitated mines across the country. As such, there is increased pressure on the Australian mining industry to develop solutions to improve social, environmental and economic outcomes of mine closures.

A range of different approaches are being explored to tackle this challenge, including rehabilitation that transforms former mine sites into tourist locations. Using former mine sites for pumped hydro projects is not a new idea, with the upper and lower pits of the decommissioned Kidston Gold Mine housing a 250MW pumped storage hydro electric power generation facility.

Finding innovative ways to reuse existing infrastructure like decommissioned mining industry sites for clean energy projects can not only help the country progress towards a clean energy future, but also tackle the thousands of mine sites across Australia awaiting rehabilitation.

The 1GW Western Sydney Pumped Hydro project will pump water from Lake Burragorang through tunnels to an upper reservoir contained within an old coal washery, which will be revegetated.

The 1GW Western Sydney Pumped Hydro project will pump water from Lake Burragorang through tunnels to an upper reservoir contained within an old coal washery, which will be revegetated.

Site-specific features

The project site at Nattai, on the escarpment above Lake Burragorang, has many favourable and beneficial characteristics for a pumped hydro project, including:

  • It makes best use of land already disturbed – the project will be built on an old coal mining industry site, avoiding substantial clearing of bushland and impacts on biodiversity
  • It is steep – the site has a large 400m elevation change over 3.1km supporting the requirements to efficiently
    generate electricity from hydro power
  • A reliable water supply already exists – Lake Burragorang exists to supply Sydneysiders with drinking water and it will also be able to act as the necessary lower reservoir for the project. The upper reservoir will be constructed on the disturbed land at the former coal washery site. Water quality will be safeguarded throughout the process
  • It is close to transmission – the site is close to existing electricity transmission lines for Sydney. Cables would go underground, along existing roads
  • It will have a low impact – preliminary investigations have shown that there will be minimal impacts on the environment, culture and the local community compared to other projects

A $1 million per year Community Benefit Scheme will be created and the project is expected to generate 1500 jobs during construction and 80 operations jobs.

Early community engagement

ZEN Energy has begun engaging with First Nations groups, before a formal announcement, in the interests of prior and informed consent. ZEN Energy will engage Traditional Owners and key First Nations parties on the cultural significance of the site and work with them to better understand traditional storylines, potential impacts and benefits to inform the project design.

Formal cultural studies and management plans with Registered Aboriginal Parties will also be undertaken as part of the state planning process.

Water quality as the first priority

Water will be drawn from and returned into Lake Burragorang – as such, there is no net loss of water, ensuring its role as
a drinking water supply for Sydney remains the number one priority. The amount of water cycled between the reservoirs will be less than 0.5 per cent of the volume of Lake Burragorang.

The project is designed to not alter dam levels, cause flooding or inundation of the shoreline and surrounding natural environment. Even though the project will pump 20GL of water through its closed loop system, only a faint ripple on the surface of the lake will indicate the project is underway.

Located 30km from where the scheme is proposed to connect, Warragamba Dam was first constructed in the 1960s. Since then, the lowest the water volume has dropped during drought is 37 per cent of its full capacity. The project has been modelled at this low level and can continue to operate with no impact on water supplies or dam levels.

A formal review by consultants BMT using 3D modelling found that the project will not impact the quality of Sydney’s drinking water. The review also found that the project will be able to operate at full capacity during extreme flood and drought conditions without impacting Sydney’s water supply.

Importantly, WSPH does not increase the risk of algal growth in Lake Burragorang. In fact, due to cooling of the surface water and weakening of stratification at the lower intake, algal growth may be discouraged.

Construction of the upper reservoir at the old coal washery site will include an impermeable liner to prevent contact between the water and underlying ground.

A water quality monitoring plan will be developed in conjunction with WaterNSW to guarantee water quality. The project will also be subject to rigorous planning assessments, regulations and management plans for water quality and security.

Pumped hydro’s role in the transition

While wind and solar are expected to make up the bulk of electricity generation in the future, a portfolio of dispatchable storage technologies is essential to ensure the lights are kept on during still and dark periods.

It is also important to invest in a diversified portfolio of storage technologies. While short duration batteries will play an important role in firming wind and solar, technology and operating duty risks should be spread across a range of dispatchable storage types and durations. These long duration storage projects are critical to allow the National Electricity Market (NEM) to deal with those dark, still times when there is short supply of both sunshine and wind – sometimes for days or weeks at a time.

Pumped hydro is the cheapest form of long duration storage. Analysis from the CSIRO shows that in 2025, the levelised cost of storage of an eight-hour pumped hydro project is forecast to be about 30 per cent cheaper per megawatt hour than an eight- hour lithium-ion battery project.(2)

While long duration batteries are coming down the cost curve, the cost reductions are yet to be realised and are not guaranteed. Future battery costs will be driven by a range of factors, including critical mineral availability and supply chain constraints.

Furthermore, pumped hydro has a lifespan of about 80-100 years(3) and when properly maintained, civil infrastructure such as dams and tunnels have an indefinite economic life. The degradation of pumped hydro is negligible. In contrast, the technical life of a utility-scale battery is roughly 15-20 years, as the plant degrades to approximately 60-65 per cent of its initial capacity over this time (based on one cycle per day).(4)

As a result, batteries need to be refurbished or replaced on a rolling basis, involving additional waste, cost and administrative burden to run ongoing dispatchable CIS tenders. Utility-scale batteries also need to ‘overbuild’ in order to meet their 2030 capacity commitments to account for the degradation.

A select portfolio of well-maintained pumped hydro schemes across the NEM can underpin the reliability of a decarbonised NEM for decades, operating alongside wind, solar and other forms of short term and emerging storage technologies.

Large-scale energy storage projects like the WSPH project are key to keeping the lights on and energy prices in check in New South Wales as coal-fired power stations age and retire over the next decade.

Featured image: Mountains of coal dust and spoil have been removed from the former Wollondilly Coal Washery as part of remediation that will be completed as part of ZEN Energy’s pumped hydro project. Images: ZEN Energy


  1. Enabling mine closure transitions: Opportunities for Australian industry report: futures/energy-and-resources/mine-closure-and-transitions
  2. CSIRO, Renewable Energy Storage Roadmap, March 2023, 54
  3. Aurecon, 2023 Cost and Technical Parameters Review, prepared for AEMO, 15 December 2023, 138-139
  4. Aurecon, 2023 Cost and Technical Parameters Review, prepared for AEMO, 15 December 2023, 144-145

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