Renewable energy: Australia bets on a ‘water battery’

Pumped hydro can generate electricity to offset irregular wind and solar power. But critics worry it is too expensive

It took 100,000 construction workers a quarter of a century to bore through the Snowy Mountains to build Australia’s largest hydroelectric scheme. The vast nation-building project links nine power stations and 16 dams via a network of 145km of tunnels and pipelines, providing irrigation water and energy that has helped transform the country’s economy since it began operating in 1974.

Now, almost half a century later, Australia’s newly elected government is placing the state-owned Snowy Hydro plant at the vanguard of another energy transition by transforming it into a massive “water battery” that will help keep the lights on as the country shifts from an electricity grid based mainly on fossil fuels to one built around renewable energy.

“We are betting the whole company on it,” says Paul Broad, Snowy Hydro’s chief executive, who confounded critics by persuading Canberra to back an expansion worth more than A$5bn ($3.5bn) that was dismissed just a decade ago as too expensive and risky. “You can’t have renewables without reliable storage and the best form of storage is water.”

Pumped hydro is a century-old technology, which provides about 95 per cent of worldwide energy storage linked to electricity grid systems. It works by using excess or cheap power at off-peak times to pump water into raised water basins, from where it can be released to generate electricity when demand and prices are highest. The need for storage is expected to accelerate massively with the greater use of renewables — and while there has been a lot of hype surrounding lithium batteries, pumped hydro is expected to remain the backbone of the renewables revolution.

Advocates argue that pumped hydro represents a 20th century solution to a 21st century problem: how to bridge the gap and provide constant power, when using intermittent sources such as wind and solar. And for its backers, Snowy 2.0 — which is scheduled to be completed by 2025 — will act as a showcase for the technology and encouragement for other nations to begin the shift to a grid based 100 per cent on green energy.

It is the centrepiece of Canberra’s energy policy, which opposition parties, business and environment groups criticise for lacking coherence. The conserva

tive coalition, led by Prime Minister Scott Morrison, is a staunch supporter of coal, which still generates 60 per cent of the nation’s electricity and was its top export earner last year worth A$69bn.

But A$31bn of investment on renewable energy since 2017, driven by falling prices and the resumption of a green energy target set by the previous Labor government, is changing the nation’s energy mix.

Just over a fifth of Australia’s electricity is now generated by renewables. Over the past two years the country has deployed wind and solar generation up to five times faster than the US, China or the EU on a per capita basis. This shift away from coal, a reliable and easily dispatchable power source, to intermittent wind and solar, combined with weaknesses in transmission networks and lack of storage, has made the power system vulnerable.

A statewide power cut in South Australia in 2017 and outages in Victoria in January demonstrated how the nation’s electricity system has become exposed at times of peak demand amid questions over the reliability of solar and wind farms in adverse weather.

Coalition backbenchers have lobbied for construction of a new coal power station to stabilise the system but there is little support for such a controversial project given the need to reduce emissions. Faced with a political dilemma the coalition turned to Snowy Hydro to provide enough storage to boost the grid’s resilience when the sun isn’t shining and the wind isn’t blowing.

“Australia is one of the first countries heading towards a mainly solar and wind based renewable energy system, so in a sense we are the international pathfinder to move towards a solar and wind future,” says Andrew Blakers, professor of engineering at Australian National University. “Snowy Hydro is important because if we don’t put in more energy storage then the electricity system will run into serious trouble by the mid-2020s.”

The floor begins to shake and a loud rumbling forces people to scramble for ear plugs when Guy Boardman starts up one of the six generators at Snowy Hydro’s Tumut 3 power station. Under the floor thousands of cubic metres of water gush through enormous pipes that run up to a reservoir at the top of a nearby mountain, rotating turbines to generate electricity. Power can be dispatched to the grid within a few seconds.

Since Snowy 2.0 was announced by the government, the station’s employees have been busy demonstrating to politicians, media and other dignitaries how the company’s existing pumped hydro facility is already helping to keep the lights on in the nation’s capital Canberra, which is about a two hours’ drive away. The plan is to build an additional 2,000 megawatts of generation and quadruple the amount of electricity storage — enough capacity to power 500,000 homes continuously for about a week. The upgrades, which involve building an underground power plant and 27km of tunnels, would make the scheme one of the largest pumped storage facilities in the world.

“The beauty of hydro is that it is a renewable energy supply that is available on demand. So when the market needs electricity we simply use the water that we have in our upper storage to drive the turbines in this power station, providing electricity to the market,” says Mr Boardman, the area manager for Snowy Hydro. “When we have all six units pumping there is enough water flowing through our plant to fill an Olympic-sized swimming pool every two seconds.”

These dramatic numbers have failed to impress critics who say that not only is the state-owned mega project too risky, but that it is crowding out more cost-efficient pumped hydro projects. Others say competing storage technologies, such as lithium-ion battery farms and solar thermal-energy storage, as well as increased investment in transmission networks, could provide a more cost-effective solution.

“Snowy 2.0 should dominate the storage market, placing it in an incredibly powerful position for a state-owned company,” says Tony Wood, energy expert at the Grattan Institution, a Melbourne-based independent think-tank.

“It’s also a big risk for taxpayers,” he adds, citing the technical difficulties in digging tunnels and the possibility that future administrations will be less supportive of the renewables industry — a move that would limit future demand for storage.

In the 1960s and 1970s, pumped hydro was typically deployed by publicly-owned utilities alongside nuclear or coal power stations, which provided low-cost electricity to pump water up hills at night during off-peak periods that could then be used when consumer demand spiked. But as companies deploy wind and solar energy on to national grids pumped storage is enjoying a renaissance as a means to help stabilise electricity systems.