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16/10/24

Pumped Storage Hydropower Series: Australia's Integrated System Plan

The Integrated System Plan (ISP) is the roadmap to Australia’s energy transition. Published every two years, the ISP was developed following a 2018 review into the future security of Australia’s energy system, and features in the National Electricity Rules. The ISP arose out of the need for better energy system planning. Its role is to forecast the ideal development path for essential infrastructure needed in the Australian energy system.

The ISP forecasts out to 2050, aligning with the government’s net-zero targets. The plan is developed by the Australian Energy Market Operator (AEMO) as part of its role as national transmission planner and market operator and the process involves extensive stakeholder engagement and input from other agencies, including the Commonwealth Scientific and Industrial Research Organisation (CSIRO), which estimates the cost of building new electricity generation, storage, and hydrogen production in Australia. The creation of the ISP uses economic and engineering analysis to model the generation mix and identify the best combination of generation, storage, and transmission to meet government policy targets.

Snowy Hydro power station, New South Wales, Australia
Snowy Hydro power station, New South Wales, Australia

The 2024 ISP forecasts the need for 36 GW/522 GWh of storage capacity in 2034-35, rising to 56 GW/660 GWh of storage capacity in 2049-50. Storage is split between deep (12 hours or more), medium (4-12 hours), shallow (4 hours or less) and consumer-owned storage (batteries and electric vehicles). Increasing variable renewable generation and retirement of coal-fired generation are the key drivers behind storage growth in Australia. Energy storage is essential to cover periods of low sunlight and wind (Dunkelflaute/renewable droughts) and to provide grid stabilising services like inertia, voltage and frequency control. It also supports contract market liquidity through firming contracts.

Pumped hydro is highlighted in the ISP as a key part to achieving storage goals, with Snowy Hydro’s 2.2 GW/350 GWh pumped hydro project (Snowy 2.0) currently under construction. Other pumped hydro projects mentioned in the 2024 ISP include Queensland Hydro’s Borumba Pumped Hydro Project (2 GW/48 GWh), Genex’s Kidston Pumped Hydro Project (250 MW/2 GWh) and Hydro Tasmania’s Cethana Pumped Hydro Project (750 MW/15 GWh). Pumped hydro is heavily utilised in the ISP modelling due to its cost-effective system benefits and is integral to meeting the deep storage requirements of the Australian energy system out to 2050.

Kidston Pumped Storage Hydro Project - Credit: Genex Power

One way to streamline the process is to ensure that environmental and social permitting is aligned with international standards for sustainability, such as the internationally recognised Hydropower Sustainability Standard (HSS). The Standard can apply to projects that are in development past permitting stage; to better support early project development, the Hydropower Sustainability Alliance has recently created the HydroSELECT tool to support projects, based on the principles of the HSS. Additionally, developers can use experience and international standards across multiple markets and avoid navigating bespoke national rules. Use of the Standard in this way can also speed up financial approval processes if international lenders are also aligned with the Standard in their ESG assessments.

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