In the quest for energy security and economy decarbonisation, pumped hydro energy storage emerges as a way to address intermittency of renewable generation. There is no real question that this resource is significant and available in Australia. However, the scale of pumped hydro projects plays a pivotal role. It is a topic that is animating the current election in Queensland.
Small pumped hydro projects offer benefits such as flexibility in location, lower environmental impact, and quicker implementation. They are cost-efficient for localized needs and involve lower financial risk due to their smaller capital investment requirements. However, their lower energy storage capacity and limited grid support may make them less suitable for large-scale energy demands.
On the other hand, large pumped hydro projects, despite their high initial costs and longer development times, provide substantial energy storage capacity and significant grid stability. They benefit from economies of scale, leading to lower per unit costs and long-term economic benefits. Large projects are instrumental in stabilising the grid and accommodating the variability of renewable energy sources, which is crucial for enhancing energy security. However, there are risks with megaprojects. When mistakes are made they are big ones.
In addressing the twin imperatives of energy security and economy decarbonisation, large pumped hydro projects emerge as a more appropriate scale of investment. Their substantial energy storage capacity and economies of scale ensure cost efficiency over the long term, making them essential for achieving widespread decarbonisation at a competitive cost. For a robust and sustainable transition to a low-carbon future, prioritising large-scale pumped hydro projects is probably the optimal path forward. Let’s invest in the future of energy and secure a sustainable, decarbonised economy.
So a series of small bets, or one big bet. Are bigger batteries better batteries? Which way would you go?
#EnergySecurity #Decarbonisation #PumpedHydro #Sustainability #RenewableEnergy
Image source: ARENA
Lytton Advisory 