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Pumped Hydro — a deeper and more meaningful energy solution

The Snowy Mountains Scheme resonates as a nation-building project in Australia’s history.  Today Snowy Hydro’s hard-working, relatively simple technology — which harnesses falling water to turn turbines that generate electricity — is a renewable-energy mainstay of the interconnected state electricity grids of eastern and southern Australia.

Globally, countries are rethinking the potential of hydro electricity. Yves Rannou, president and CEO of the hydro business within GE Renewable Energy, was recently in Australia to discuss hydro storage opportunities including the proposed Snowy 2.0 scheme. He used GE Hydro’s latest project, Kraftwerk Linth-Limmern (KLL) in the heart of the Swiss Alps,  as a demonstration of the efficiencies and flexibility that new technologies can deliver.

GE’s variable-speed hydro storage systems were last year applied to triple the capacity of the KLL hydroelectric facility — taking it from 520MW to 1,520MW.  Most importantly, it added 34 gigawatt hours (GWh) of storage to the Swiss grid, the equivalent of 340,000 fully charged electric cars. But that’s a mere frisson of energy compared to the scale of Snowy 2.0, which is planned to provide 350 GWh of storage.

As in Switzerland, the boosted capacity to efficiently pump water back upwards in the system when demand is low, will transform the Snowy Mountains Scheme into “an asset of the energy transition”, says Rannou.

Here, GE Reports talks to Rannou about the pros, cons and alternatives to expanding on the Snowy Mountains Scheme.

GE Reports: Globally, how is hydro-generated renewable energy viewed today?

Yves Rannou: Hydro has been a commercial source of power for more than 130 years. When you’ve been around for a long time, it doesn’t mean you’re automatically relevant for the future. What’s happening now in the hydro ecosystem is that communities, policy makers, politicians and opinion leaders are reevaluating the ability of hydro power to address the challenges of the future. Let me explain:

  • Hydro is a source of electricity.
  • As a storage technology, hydro is a foundation of the energy transition, because it helps the grid to absorb the variability of wind and solar sources and become more stable
  • Hydro is about water management. Water is a scarce resource and probably the greatest challenge we will face for years to come. How do we get access to fresh water for the most people? How do we manage water so we don’t waste it, so we have irrigation for food security, and we have electricity security? Water is the challenge of the 21st century and dams, hydro storage, provide a means to manage this resource.

GE Reports: What is the market for hydro worldwide?

YR: There is a resilient worldwide market. Depending on the geography and economic development of the country, and the age of the installed base, we have a market for rehabilitation — in North America, Central Asia and Brazil; a requirement for storage — Australia, China, Israel and the US; and a need for greenfield capacity — in Africa for instance.

GE Reports: Where do you see the opportunities in Australia?

YR: In Australia GE already has an installed base of 4.5GW of hydro capacity and a dedicated local hydro services team. Australia has potential for small- to medium-sized hydro, but it’s clear that storage will become an essential source of investment in Australia, and the biggest single opportunity at the moment is to build on the Snowy Hydro asset with Snowy 2.0.

GE Reports: Large-scale battery storage has been successfully deployed in South Australia. Why wouldn’t we continue to install batteries as backup for wind and solar?

YR: Because they don’t have the same scale or purpose, and it’s not a case of using one or the other. There must be a mix.

Batteries might be the perfect storage solution in a remote area where you have a wind farm and community without connection to the grid. But for Australia’s east and south, such a large grid, supporting a population of more than 20 million and high industrial activity, big cities … you need a tool that’s able to cope with high demand and large quantities for long timeframes.

In Australia your challenge is to catch up with the very dynamic investment in wind and solar. You don’t have a tool to help stabilise the grid.

Snowy 2.0 is about storage of a very large quantity of power. It’s a pumped-hydro system, meaning that when there is excess electricity in the grid from solar or wind that energy is used to pump water upwards to reservoirs upstream. When you need electricity you let that water go through the turbines. The reservoir is already there and has the largest capacity storage in the world — 175 hours of power, that’s more than seven days at full capacity.

Hydro storage is the cheapest way of storing electricity. We have studies demonstrating that even in the coming 10 years, with the price deflation expected on batteries, hydro will remain more competitive when it comes to moving energy at GWh scale. And don’t forget, the lifetime of a hydro plant is 80+ years; whereas batteries are eight or ten years.

GE Reports: GE is pitching to provide electromechanical equipment for Snowy 2.0. What can you tell us about the changes in technology since the construction of the original Snowy Mountains Scheme?

YR: Today’s technology is much more efficient. Your asset is more financially sustainable because of the efficiency of the machines — their ability to produce more electricity and to consume less when pumping.

Today’s technology is also more flexible, meaning it can react very quickly to variations in the grid or ancillary services markets. Australia’s existing pumped-hydro facilities use fixed-speed technology, probably changing mode between generation and pumping twice a day. Now, with wind and solar in the grid, you might have to change the flow several times a day and need to adapt not only quantities produced, but also quantities stored. The flexibility of the variable-speed technology available today means we are able to respond to changed grid conditions within seconds. It’s extremely responsive.

GE Reports: What about the environmental impact of the Snowy 2.0 works, for example the huge volumes of rock that will be displaced by boring 27 km of tunnels through the Snowy Mountains National Park?

YR: We are aware that concerns have been raised with this project. We understand and respect that there are many different perspectives on these types of projects and we take those into consideration in our own evaluation. Ultimately, whether a hydroelectric project should be pursued is a public policy choice that is made at a national or local level and we are supportive of the regulatory process that underlies that decision making.

All energy projects have some environmental impact, and siting of virtually any large project, including other forms of renewable generation, can be challenging. Ultimately, electricity storage is a real need in Australia, and hydropower is a low-carbon option. It’s also one of the most competitive renewable energy solutions available to meet that need.

This is not the first time a civil works company will be drilling a tunnel of 27 kilometres, even in very preserved areas. Switzerland has been doing it, and I think both Switzerland and Australia are extremely sensitive to the environment. The Talbingo and Tantangara reservoirs are already there, so building on these existing assets represents an opportunity both environmentally and economically.

GE Reports: People are also very concerned by the cost of Snowy 2.0.

YR: I understand there is a preliminary budget for Snowy 2.0 of around $4.5 billion, plus $2 billion to upgrade transmission lines.

While this is certainly a lot of money to pay up front, when you consider that we are talking about 175 hours of electricity storage, in an asset that will last more than 80 years, the cost per megawatt hour ends up being the most competitive in the world by a large margin.

Snowy 2.0 will also allow Australia to tackle its energy transition and reduce other costs associated with pollution. Finally, we need to have in mind that hydro brings many additional benefits such as water management, irrigation and regional investment.

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