Why do we need pumped hydro?

Economies around the world are moving to reduce carbon emissions from predominantly coal based energy generation to renewable based generation and Queensland is no exception. We have seen first-hand the impacts of climate change in our state, and how critical it is we move towards a cleaner energy system.

Here in Queensland, we have been installing rooftop solar, large scale solar and wind generation, with an average of 25% of our electricity generation now coming from renewable sources. This will continue to grow as we move toward achieving renewable energy targets and as our ageing coal-fired power generation facilities begin to close.

To keep the lights on as we transform the energy system, we will need a myriad of renewable energy solutions. This is where pumped hydro comes in. If you’re unsure what pumped hydro is, click here. 

But how does pumped hydro stack up? Where does it fit in the renewable energy mix? Let’s discuss the case for pumped hydro.

Firstly, let’s talk about the need to store energy

As the Sunshine State, we produce vast amounts of solar energy. We have the highest percentage of rooftop solar generation globally and numerous large-scale solar generation sites scattered across our state. However, with solar generation, you need to use it or you lose it. And if it’s raining (or it’s night-time), solar alone will not meet the needs of Queensland homes and businesses.

Our vast amounts of solar energy (and wind) needs to be stored so that it can be used at times when it is not readily available. This might sound obvious, but it’s a core part of developing a stable and reliable renewable energy system. But what is energy storage, and why do we need it?

One of the reasons we’ve relied on coal is because it’s, well, reliable. Coal releases energy when it’s burned, and it can be piled up and burnt exactly when we need it. We burn more coal when people are awake (peak), and less coal when we’re asleep (off-peak). We call this demand.

As Queensland transitions to low-emissions energy, targeting 80% renewables by 2035, the gap between the variable renewable supply from wind or solar and the demand for reliable power will widen. This is where storage comes in.

Energy storage is critical because it means Queensland will have reliable energy supply even when renewable energy generation is low. We call this firming, and it means to have a consistent supply of energy to meet demand and prevent outages.

With the move to renewables, the Australian Energy Market Operator (AEMO) has confirmed we'll need 30 times our current level of storage from firming technologies - such as pumped hydro, batteries and gas - by 2050. This makes Queensland Hydro’s pumped hydro energy storage projects critical as we increase the amount of renewables and move away from coal.

How does pumped hydro store energy?

Pumped hydro stores energy in the form of water. Unlike traditional hydroelectric systems where water passes from a reservoir through a power station then flows downstream, pumped hydro cycles the same water between two (or more) reservoirs located at different heights. During the day, water from the lower reservoir is pumped up to the upper reservoir using the excess energy in the system from wind and solar. At night, or when there’s less renewables available in the system, water from the upper reservoir is released through tunnels into a power station, and into the lower reservoir - which generates power. That same water is again pumped back to the upper reservoir during the day, and the cycle continues.

In this way, we are able to solve the storage problem while also providing an ongoing clean energy source. By pulling that extra solar or wind out of the system and using it to move the water around, we’re now able to “store” renewable energy.

You can think of pumped hydro as a large, rechargeable battery. Rather than using lithium or other critical materials to recharge, it uses excess renewables in the grid and the power of water to release energy when needed.

What’s the difference between pumped hydro and traditional batteries for storage?

Batteries provide short duration energy storage (0-4 hours) and can be used to smooth out the variability of wind and solar generation over short time periods. Batteries are also useful in managing demand when there’s outages of other generators or emergencies.

By comparison, long-duration storage like pumped hydro is needed to provide large amounts of generation for those rainy days or windless nights where there are prolonged periods of low renewable generation.

In short, batteries and pumped hydro both store renewable energy and improve the reliability of wind and solar but in different scenarios. Both are important, and we need a balance to provide a holistic solution in our renewable energy mix.

Don’t batteries provide better storage?

The scale and capacity of long-duration pumped hydro is significantly greater than the biggest utility-scale batteries, enabling cost efficient delivery of electricity to consumers long after batteries have discharged.

Let’s use an example, comparing our proposed Pioneer-Burdekin Pumped Hydro Project with South Australia’s Hornsdale battery.

The Pioneer-Burdekin Project has a proposed capacity of 5,000 MW and a duration of 24 hours, which will provide 120,000 MWh of energy storage (5000MW x 24h = 120,000MWh).

The Hornsdale battery has a storage capacity of 193.5MWh, with a capacity of 150MW and a short duration designed to last just over an hour. It’s a fantastic resource for responding to generator outages within the South Australian electricity system and responding to variations in demand.

It would take approximately 620 Hornsdale big batteries (120,000 MWh divided by 193.5 MWh) to provide the same volume of energy storage as the Pioneer-Burdekin Project.

Now, let’s factor in cost. According to the CSIRO, pumped hydro energy storage systems are the cheapest form of storage for any duration between 8-24 hours, when compared against other technologies including batteries.

We also need to consider how long each technology lasts. The Hornsdale battery has a 15-year warranty before it needs to be dismantled. By comparison, pumped hydro assets can last in excess of 100 years, with appropriate maintenance.

As you can see, it’s not really an apples for apples comparison. It’s about understanding where each technology type sits and the relative benefits it can bring.

Battery technology is getting better, so can’t we just wait for that?

Future cost competitiveness of batteries will be affected by supply chain conditions, including production bottlenecks in the face of high global demand (particularly batteries required from the expected rapid uptake of electric vehicles). In fact, the world’s biggest lithium producer recently predicted that demand for lithium will exceed supply by 500,000 tonnes by the end of this decade.

There are also legitimate concerns that battery energy storage supply chains are not yet sufficiently mature to provide the volume of energy storage required in the time frame necessary to decarbonise Queensland’s energy system.

For example, the International Energy Agency identifies that in 2021 slightly more than 6,000 MW of grid-scale battery capacity was added globally, predominantly with storage durations shorter than 2 hours. If this duration remains the same, we would need ten times the battery capacity deployed globally in 2021 just to match the volume of energy storage available at the Pioneer-Burdekin pumped hydro project.

To achieve a reliable and renewable energy system for Queenslanders, pumped hydro is key.

As at 22 August 2023