The Australian Renewable Energy Agency (ARENA), on behalf of the Australian Government, has announced up to $40 million in funding towards the deployment of a Pumped Hydro Energy Storage (PHES) project in South Australia. This funding will help to fast track development of South Australia’s first PHES plant.
As South Australia continues to increase its renewable energy make up, large-scale storage such as PHES and grid-scale batteries are needed to supply system strength, energy reliability and inertia to the region.
Pumped hydro energy storage uses excess renewable energy during low demand periods to pump water uphill where it is stored until needed, at which point the water is released to power a turbine, generating electricity.
The development of a large-scale PHES plant would balance and firm up variability in the South Australian National Electricity Market region, providing a range of services to support grid reliability and security – including essential stability services as well as ‘intra day’ storage for six to eight hours duration.
According to ARENA, the successful funding recipient needs to achieve at least 200 MW in capacity and must reach financial close by 30 June 2020.
Four proposed large-scale PHES projects in development in South Australia have sought ARENA funding and have been assessed favourably under its Advancing Renewables Program.
These projects have been invited to put forward proposals for further assessment that outline how the project will reach financial close and includes their lowest funding request from ARENA.
After proposals are received by October, the federal agency will undertake further assessment and due diligence on the four advanced projects to select a single funding recipient, with a funding decision to be made by late 2019.
ARENA states that it will work with both the Australian Government’s Underwriting New Generation Investments program (which has shortlisted 12 projects including six PHES projects, of which three are in South Australia), and the South Australian Government’s $50 million Grid Scale Storage Fund to support the development of PHES in South Australia.
ARENA CEO, Darren Miller, said pumped hydro will play a growing role as the share of renewables increases.
“With 50 per cent of total energy generation in South Australia coming from variable renewable energy in 2018, and an expectation that this will increase in the next two years, there is an increasing requirement for energy storage to firm and balance the system in that state,” he said.
“As part of this, pumped hydro has an important role to play in Australia’s energy transition.”