Pumped hydro: How does it work and what’s the fuss?
The Tasmanian and Federal Governments are pushing ahead with plans to make Prime Minister Malcolm Turnbull's vision of Tasmania as "the battery of the nation" a reality.
Government ministers met at Lake Cethana in the Tasmania's north-west on Wednesday to unveil a list of 14 sites with high potential for pumped hydro energy storage.
So what are the issues, and what is pumped hydro?
Australia's energy future: A tale of two hydro systems
Pumped hydro systems actually use more power than they generate. Yet they could play a key role in Australia's future energy network.
As more coal power stations retire and more intermittent renewables enter the market, something is needed to help fill the gaps. Energy Minister Josh Frydenberg believes pumped hydro fits the bill.
"We need to balance out the volatility with reliable, dispatchable power and this is where pumped hydro can really make a difference," he said.
Pumped hydro is like creating a big battery. When there is excess power in the system, for instance on a windy night, energy is used to pump water up.
Then when there is demand for energy, the water is released. As it falls, it turns turbines that create the power.
While several smaller pumped hydro projects are being investigated, two big plans have come to the fore: Snowy 2.0 and Tasmania's "battery of the nation".
Both plans build on significant hydro power infrastructure, and both are owned by governments — Snowy by the Federal Government and Hydro Tasmania by the State Government.
Energy analyst Tony Wood from the Grattan Institute said the two projects "create a really interesting option for Australia", as the country moves towards a new version of its energy system.
But the projects are not without issue.
Compare the pair: Snowy and Tasmania
Hydro Tasmania yesterday released initial details about the potential for pumped hydro in the state, identifying 14 possible sites across eight locations on the island.
Snowy 2.0 is one big project — connecting its massive Talbingo Reservoir to its Tantangara Reservoir with a 27-kilometre tunnel.
In terms of costs, based on its initial figures, Hydro Tasmania's plan is cheaper to build.
It would cost between $1.05 and $1.5 million per megawatt to build, while Snowy 2.0 is expected to cost between $1.9 and $2.25 million per megawatt.
Hydro Tasmania wants to develop enough sites to produce 2,500 megawatts, and Snowy 2.0 would produce 2,000 megawatts.
However, Snowy 2.0 can store more power, with its system holding 175 hours of energy storage, while Hydro Tasmania would have between eight and 36 hours.
CEO of Australian Renewable Energy Agency Ivor Frischknecht offered the analogy of a car: "Tasmania's battery of the nation provides us with a bigger engine as well as a slightly bigger fuel tank, but Snowy is more focused on the size of the fuel tank."
A big tunnel versus new dams
Mr Wood said Snowy 2.0 was further progressed in terms of technical planning.
Rock samples from along the proposed route of the 27-kilometre tunnel are currently being tested.
Geotechnical engineer Emilio Lapointe is among the team analysing the rock cores.
"This gives us a relatively quick and easy way of seeing, [if we can get] this done. Is the rock good enough quality for us to build in?" she explained.
"That's the first stage of any project really, from a concept to is it actually doable."
The Snowy Hydro board will make a final investment decision on the project by the end of the year, but CEO Paul Broad said he was confident.
"This is an economic project, this is a project that works," he said.
"Some people say, 'Oh this is some sort of project that's going to be funded from the taxpayer', but it's not. It's funded off our balance sheet. We're doing it because we believe it works."
In the nearby town of Cooma, locals are sharing in the early confidence.
"I think everyone really believes the project will go ahead," local publican Michael Sharkey said.
"Everyone's just been overjoyed, basically.
"There's been a lot of bar talk about it, people are discussing property prices going up and just the amount of flow-on effect it'll have on the town."
Hydro Tasmania has the advantage of not having to build a big tunnel because of the smaller size of its proposed sites, but the sites still need to be finalised.
The smaller projects will allow more flexibility but unlike Snowy, it will require new dams.
"What's most concerning to stakeholders is when we're damming existing rivers, our pumped hydro projects involve utilising existing reservoirs and building new reservoirs which are off river," the CEO of Hydro Tasmania Steve Davy said.
How to get the power where it is needed?
There is one big hurdle in Tasmania's plan — namely, how to get the cheap clean power to the mainland where the demand is.
Currently there is only one cable, called an interconnector, across Bass Strait for power to travel to the mainland.
A second interconnector has long been touted, but would likely cost $1 billion, and there is no word yet on who would pay for it.
"The feasibility study is important in developing decisions on the interconnector," Mr Frydneberg said, when asked about possible funding sources.
Snowy Hydro has a geographic advantage in terms of accessing markets as it sits between Sydney and Melbourne, but it also needs more interconnection.
"The transmission networks are built around the thermal powers, and unfortunately where the renewables are being built is not where the thermals are," Mr Broad explained.
The transmission upgrades could cost an additional $2 billion.
"If I've got a business in Sydney and they're upgrading the highway between Sydney and Melbourne, I'm not paying for the highway," Mr Broad said.
"The people who are using the highway are the ones paying for it, the exact same thing will happen on transmission, as it happens today."
Federal Government not playing favourites
While Snowy 2.0 has been seen as one of Mr Turnbull's pet projects, the Federal Government said it was not playing favourites.
"They're both important projects," Mr Frydenberg said.
"They're not mutually exclusive, they're actually compatible with each other."
With the potential of so much power to leave the system as coal-fired plants retire, Snowy Hydro and Hydro Tasmania also think both of their projects will be needed.
Mr Grattan said while it was still early stages, the pumped hydro projects were a "really important option to be fully run down into the ground and one of the most exciting options we have to balance large amounts of wind and solar".
He still wants to see further economic analysis on the projects but said both may be needed.
"So there's a lot of uncertainties as we move into this future, but at least we can now see some real options in front of us."