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What is hydropower?

Hydropower converts the energy of moving water into electricity. It includes a number of generation and storage technologies, predominantly hydroelectricity and Pumped Hydro Energy Storage (PHES). Hydropower is one of the oldest and most mature energy technologies, and has been used in various forms for thousands of years.

Hydropower now provides some level of electricity generation in more than 160 countries.

How is hydroelectricity produced?

Hydroelectricity is produced by passing water, usually from a reservoir or dam, through an electricity generator known as a turbine. As the water passes through the turbine blades, it drives the generator to convert the motion into electrical energy.

How does PHES work?

PHES uses water reservoirs as a way of storing energy. Excess energy, either from the grid or a renewable energy source such as a wind or solar farm, can be used during low demand periods to pump water from a lower dam to a higher one, essentially converting the upper reservoir into a giant battery.

The stored energy can then be released by returning the water through a hydroelectric turbine into the lower reservoir. Hydroelectricity can be generated almost immediately and at any time, making it possible for the power to be fed into the grid when it is needed, to help reduce surges, avoid blackouts, or meet spikes in electricity demand.

PHES can also produce large amounts of electricity over a long duration so can provide reliable and dispatchable generation.

Hydropower in Australia

Hydroelectricity has been providing around 5-7 per cent of Australia’s total electricity supply for decades.

There are over 120 operating hydroelectric power stations in Australia, large and small, mostly located in south eastern Australia. The most well known of these is the Snowy Mountains Hydro-Electric Scheme. There are also three major PHES systems connected to the national electricity grid.

The Australian Government’s first Low Emissions Technology Statement identified the importance of large-scale energy storage solutions, such as PHES, to ensure the security and reliability of Australia’s electricity grid.

In 2021, we announced funding for Australia’s first PHES system in 37 years. Located at the former Kidston Gold Mine in north Queensland, the project will be the first to support the integration of variable renewable energy generation from solar and wind.

In 2020, construction began on the Snowy 2.0 project, which will link two existing dams in the Snowy Mountains and provide 2000 MW of capacity and 350,000 MWh of storage. We supported the feasibility study for this project, which, once built, is forecast to be able to power approximately 3 million homes over a week.

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How are we supporting PHES projects?

Our purpose is to support the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers. By connecting investment, knowledge and people to deliver energy innovation, we are helping to build the foundation of a renewable energy ecosystem in Australia.

We have identified that PHES will play a significant role in helping Australia transition to renewable energy, and will continue to provide funding support and guidance to assist with development and financing.

Knowledge sharing

Knowledge Bank iconWe share knowledge, insights and data from our funded projects to help the renewable energy industry and other projects learn from each other’s experiences.

Read PHES project reports in the Knowledge Bank

Explore our PHES projects

Learn how we work with renewable energy technologies

Last updated 05 April 2024
Last updated
05 April 2024


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