NSW injects $45 million into pumped hydro projects

The New South Wales Government has awarded $45 million in funding to five pumped hydro projects, which will deliver a combined capacity of almost 1.75GW of energy storage to the state.

New South Wales Treasurer and Minister for Energy, Matt Kean, said the state’s Pumped Hydro Recoverable Grants Program will assist pumped hydro developers to cover upfront costs and lower investment barriers for the private sector.

“Funding agreements are already in place with five applicants who have received a total of $44.8 million to support pre-investment activities, establish project feasibility and develop a strategic business case,” Mr Kean said.

“If these pumped hydro projects proceed to construction, they are expected to create more than 2,300 jobs and attract $4.4 billion of private investment, which will help grow the economy and support the regions.”

Pumped hydro acts like a giant battery for the electricity system, using surplus renewable energy to pump water up a hill when it is sunny and windy, and releasing the water back down the hill through giant turbines that create electricity when it is still and dark.

New South Wales has a target to build at least 2GW of new long duration storage by 2030, and the Government has committed $97.5 million to accelerate pumped hydro projects that could meet that target. This includes funding for private projects as well as funding to undertake site investigations for pumped hydro potential on existing WaterNSW dams.

“New South Wales has the most ambitious renewable energy policy in the nation, which is needed to replace aging coal-fired power stations and build a clean energy future for the state,” Mr Kean said.

Successful grant recipients include:

Project name	Proponent	Capacity (MW)	Duration (hours)	Funding amount	Location (nearest town)
Lake Lyell Pumped Hydro Energy Storage	EnergyAustralia Development	335	8	$11 million	Lithgow
Oven Mountain Pumped Hydro Energy Storage	Oven Mountain Pumped Hydro Energy Storage	600	12	$9.64 million	Wollomombi
Shoalhaven Hydro Expansion	Origin Energy	235	24	$5.31 million	Bowral
Central West Pumped Hydro	ATCO Australia Pumped Hydro	325	8	$9.44 million	Yetholme
Muswellbrook Pumped Hydro	Muswellbrook Pumped Hydro (AGL Energy and Idemitsu Australia)	250	8	$9.45 million	Muswellbrook

Mr 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.

“This is a win for New South Wales as these grants will be repaid to the Government if a project reaches financial close, meaning that these same funds could be used to support even more projects in future,” Mr Kean said.