Batteries to cost $18b more than pumped hydro to firm Qld renewables
Meeting Queensland’s long-duration energy storage task for its renewable energy zones with batteries would cost $18 billion more than doing it with pumped hydro, the head of the northern state’s energy and public works department says.
Paul Martyn, director-general of Queensland’s Department of Public Works and Energy, said the government budgeted $14 billion for the 2000 megawatt Borumba 24-hour pumped-hydro storage.
“To do that with batteries would cost $32 billion,” Mr Martyn said.
Queensland Department of Energy and Public Works director general Paul Martyn. Dion Georgopoulos
He told The Australian Financial Review Climate & Energy Summit that batteries would be part of the story but pumped hydro assets such as Snowy 2.0 – where the budget has doubled to $12 billion – would be “critical to underpin that deeper seasonal storage”, along with some gas for long renewable energy droughts.
Mr Martyn also said public ownership of coal-fired power stations meant Queensland was able to keep costs down and provide much more certainty about the transition than other states, whose renewable energy zone rollouts had fallen behind schedule.
“The public ownership of transmission and the government owned transmission body being the deliverer of the REZs [renewable energy zones] also means that we can plan and co-ordinate and deliver with much greater certainty,” he said.
“I think that’s good for industry, but it’s also good for households. And it keeps overall system cost down as we roll out the process.”
NSW has privatised its generation and transmission companies and its REZs are several years behind schedule and budgeted costs have blown out significantly.
The first REZ off the rank, Central West Orana, was originally expected to be commissioned in 2025, but this was now expected in 2027 or 2028, James Hay, chief executive of the state’s EnergyCo, which is responsible for delivering REZs, told the Summit.
But Mr Hay dismissed suggestions the budget for Central West Orana had blown out fivefold to $3 billion, saying the original estimate was from “early days” before EnergyCo took over the delivery.
“The project is now significantly different in both scope and scale – so comparing those prices is just not accurate,” he said.
Cost inflation had also played a role as “supply chain has become the word on everyone’s lips”.
Marie Jordan, head of network at TransGrid, said a push to build the $5 billion HumeLink transmission system underground would deprive consumers of the $1 billion benefit of lower costs from renewables because of the extra time it would take to build, in addition to the much higher cost associated with the alternate plan pushed by opponents to overhead wires. TransGrid is also building the $2.3 billion EnergyConnect and $3.3 billion VNIWest.
Ms Jordan said it had been challenging ensuring grid stability in all states on recent weekends where the grid had received a glut of solar power.
“What that meant was the markets deciding it’s renewables and when the market decides we have to be there with the infrastructure to respond and if we delay we lose opportunities.”
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