A NSW Government website

Pumped Hydro Roadmap

The NSW Government is helping to drive a major transformation of the State’s energy system, with new and innovative technology changing the way we generate and store electricity. Pumped hydro energy storage is “nature’s battery” and its ability to act as a long-term bulk storage facility, while delivering many of the grid regulating functions similarly provided by coal-fired power stations, makes it a critical part of the future energy system.

Pumped Hydro Roadmap

The Pumped Hydro Roadmap and Handbook takes you through the process, step-by-step, to help pumped hydro projects from ideation to operation. Key features include:

  • Case studies
  • Opportunity maps
  • Regulatory Guidance
  • Best practice tips to streamline your project

Energy and storage using WaterNSW’s infrastructure

WaterNSW ran an Expression of Interest (EOI) process that sought proposals from the private sector to develop energy and storage projects on 38 state-owned dams. The EOI received 65 commercial opportunities. WaterNSW has selected a shortlist for further investigation.



Pumped Hydro FAQs

What is pumped hydro?

Hydro energy uses the force of moving water to create electricity. Hydro energy is capable of rapidly providing power on-demand, to supply electricity to consumers when it is needed. The technology has been used for several centuries to drive water wheels and mills for various agricultural and industrial uses and since the late 19th century, it has also been used for electricity generation.

Storage systems and run-of-river systems use gravity or the natural flow of rivers to drive turbines and generate electricity.

Pumped hydro takes excess water from dams and pumps it to a higher storage point so it is available to be sent through turbines for electricity generation.

What is Pumped Hydro Energy storage?

A hydro-electric scheme operates as a large battery. Water is pumped into an upper reservoir using cheaper energy when demand is low or there is an excess of renewable energy because the sun is shining and the wind is blowing. Large-scale hydro-electric facilities typically use storage or pumped storage systems whereas small-scale hydro-electric facilities more commonly use run-of-river systems. Essentially, the water stored in a reservoir awaiting use is the battery.

What can hydro energy be used for?

Basically, the generation of electricity, although hydro energy generation is also one way of balancing variable renewable energy generation, such as wind and solar. This will be important as renewable energy increases its contribution to the NSW supply mix. Pumped hydro is an established and proven energy storage solution.

Why is hydro energy used in NSW?

The NSW Government is committed to the long-term energy security of the State. The government will ensure we have the power we need when we need it.

The expected retirement of power stations in NSW during the coming decades will require replacement energy supply to be developed; renewable energy is expected to play a significant role in meeting these needs. On-demand energy generators will complement renewable energy projects, providing energy when the sun isn’t shining and the wind isn’t blowing. Storing energy is crucial to ensure renewable energy is part of a reliable electricity system.

The Pumped Hydro Roadmap aligns with the goals under the NSW Renewable Energy Action Plan (REAP) and complements the government’s Transmission Infrastructure Strategy. Pumped Hydro Energy and Storage will benefit New South Wales move towards a fully dispatchable renewable energy system.

How is hydro energy used in NSW?

NSW has generated hydro-electricity for more than 75 years. There are currently 36 existing large and small-scale hydro-electric power stations in NSW and the State’s extensive river systems have potential for further projects.

The Snowy Hydro-electric Scheme was built between 1949 and 1974 and is the largest scheme in Australia. It has a 4,200MW capacity and accounted for around 9 per cent of total electricity generated in NSW in 2016. Similarly, the Shoalhaven Scheme owned by Origin Energy was built between 1971 and 1977 and has a total capacity of 240 megawatts.

NSW also has a range of small-scale hydro-electric power stations accounting for close to 1 per cent of total electricity generated in NSW in 2016. They include facilities installed in wastewater treatment plants and water transfer pipelines across the State. Sydney Water currently operates three hydro generators on its water distribution system.

What is the NSW Government doing now?

The NSW Government supports sensible, private development of new off-river, closed-loop pumped hydro infrastructure in the State. The government wants the private sector to share the load of our future energy needs.

The NSW Pumped Hydro Roadmap is delivering the access, guidance and information industry requires to develop pumped hydro energy projects, which can help deliver the energy storage capacity we need.

The NSW Government is encouraging investment in new infrastructure through private sector proposals for new energy investments on State-owned water assets, providing information to project developers and identifying suitable regions for PHE storage. The government has worked with the Australian National University (ANU) to undertake detailed mapping of NSW. ANU has identified there are widespread opportunities across the state, with 20,000 potential reservoirs found in the landscape. These could be paired-up in different ways to create 98,000 possible off-river pumped hydro sites. Over 50 terawatts of potential pumped hydro capacity has been identified in NSW.

In 2018, the Australian Energy Market Operator’s Integrated System Plan projected that NSW is expected to need 9,000 megawatts (MW) of utility-scale energy storage over the next 20 years. This is less than 1 per cent of the total opportunities identified in the mapping project.

Will more pumped hydro affect my water bill?

Yes, it is likely to be reduced. The proposals are expected to demonstrate value-for-money to WaterNSW and will not impose additional costs, so any impact on water bills is expected to be downwards. Water bills and potential changes are subject to regulatory review and determination by the Independent Pricing and Regulatory Tribunal (IPART).

Will it affect my energy bill?

The government does not propose imposing additional costs to customers’ bills, which are determined by energy retailers. Nor does it expect individual projects to be viable if costs are passed on to consumers.

The NSW Government supports a private sector-led energy market and this process makes WaterNSW infrastructure available to private sector proposals to develop energy projects. It will be up to the private sector to determine the viability of their projects in the competitive market and, consequently, any falls or rises in the wholesale portion of customers’ energy bills.

Will new dams be built on rivers?

No, not on rivers. The NSW Government and WaterNSW are not proposing new on-river dams for hydro-electric generation.

But the NSW Government supports sensible, private development of new off-river, closed-loop pumped hydro infrastructure in the State, so private operators may choose to construct their own dams – away from rivers - if they comply with the government’s stringent framework.

The preferred areas mapped cover a wide area. Does this mean there will be lots of hydro projects, or any near me?

The NSW Government has worked with the Australian National University (ANU) to undertake a state-wide mapping exercise which identifies the regions with high potential for pumped hydro energy storage.

The results of the mapping exercise do not represent planned development by private operators though. All proposals put forward by the private sector for development will be subject to the standard NSW planning assessment process, including community consultation requirements.

Isn’t this process making it easier to develop projects? Will planning approvals be easier?

No. The NSW Pumped Hydro Roadmap and WaterNSW’s EOI process do not include changes to the NSW planning assessment process for pumped hydro energy projects. All pumped hydro energy projects which proceed to development will be subject to the normal planning assessment process, including community consultation.

Do I have a say on developments proposed under the EOI?

Of course, if they are suitable to progress beyond the preliminary and non-binding EOI process. The EOI primarily aims to identify potential interest in new energy investments on WaterNSW sites.

If any projects proceed beyond the EOI process to development, they will be subject to current NSW planning regulations and oversight.

Is the government advocating pumped hydro projects we don’t need?

No. The NSW Government supports private sector led investment in new energy projects although the private sector will determine the viability of their projects in the competitive market. The NSW Pumped Hydro Roadmap provides the tools industry requires to make sensible decisions to help deliver the energy storage capacity NSW is expected to need.