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AGL, EnergyAustralia vie for $40m pumped hydro funding

AGL Energy and EnergyAustralia have muscled in on an opportunity to secure federal government funding to support pumped hydro storage projects in South Australia.

The two will face off against Trevor St Baker’s Delta Energy and newcomer Rise Renewables for $40 million of funding from the Australian Renewable Energy Agency to fast-track the first pumped hydro storage project in South Australia and beef up security of supply.

The selected successful venture of the four separate contenders will be required to reach financial close by mid-2020.

Delta Electricity’s proposed Goat Hill pumped hydro project in South Australia. Photo Supplied Supplied

ARENA chief executive Darren Miller said that with half of South Australia’s energy generation already coming from renewables and rising, there was an increasing need for energy storage “to firm and balance the system in that state”.

Pumped hydro projects act as big batteries, enabling the storage of large volumes of electricity that can be released when needed to bolster supply into the grid.

The four ventures comprise: AGL’s 250-megawatt Kanmantoo project, EnergyAustralia’s 225 MW Cultana venture, Delta’s 242 MW Goat Hill project and Rise Renewables’ 250 MW Baroota project.

They have been initially assessed by ARENA and will now be invited to put forward more detailed proposals by October before  a decision on the sole successful proponent by late 2019.

The ARENA program is separate to the federal government’s underwriting program for new firm power generation, for which 12 projects have been short-listed, including three pumped hydro storage plants in South Australia.

The government’s Underwriting New Generation Investments program however excludes big companies such as AGL and EnergyAustralia, while the Delta and Rise Renewables projects are also on that shortlist.

Under the ARENA program, projects must be at least 200MW in capacity and would have storage for six to eight hours.

The UNGI shortlist also includes SIMEC Zen Energy’s Middleback Ranges project, which isn’t among the ARENA funding contenders.

ARENA said it would work with the UNGI program and the South Australian government’s $50 million Grid Scale Storage Fund to support the development of pumped hydro energy storage in the state.

Federal energy minister Angus Taylor said pumped hydro was needed in South Australia “where high levels of ‘unfirmed’ renewable energy has impacted the security of the state’s electricity grid and driven up wholesale prices”.

Source: Financial Review