Renewable Energy and Storage Program

The Western Sydney Pumped Hydro project near Lake Burragorang, being developed by ZEN Energy, and the Phoenix Pumped Hydro project near Lake Burrendong, being developed by ACEN Australia, have both been declared Critical State Significant Infrastructure (CSSI) by the NSW Government.
CSSI status provides a clear planning pathway, with WaterNSW continuing to protect water resources as the project moves through their assessment and approval stages.

The projects, originally developed by Upper Hunter Hydro,  have a combined capacity of up to 1,393 MW and potential for integrated wind. The projects will continue to be developed and funded by AGL, not the NSW Government or WaterNSW.

WaterNSW is carrying out pre-feasibility studies of WaterNSW-owned sites to explore more opportunities to bring to market pumped hydro energy storage projects. The studies will assess a range of factors including accessibility and terrain, site constraints, geotechnical suitability, grid connectivity and others before any decisions are made.

Read our March 2025 Renewable Energy Storage Program start of pre-feasibility studies update (PDF, 161.25 KB) to learn more.

As part of the Renewable Energy and Storage Program, WaterNSW has partnered with three developers to support the planning and development of key projects. The projects are being developed and funded by the private sector developer, not the NSW Government or WaterNSW.

Read our November 2024 Renewable Energy Storage Program update (PDF, 329.72 KB) to understand how these projects are progressing.

Pumped hydro is a highly efficient and reliable method of storing and generating electricity and plays a crucial role in NSW’s transition towards a more sustainable and renewable energy future.

Pumped hydro harnesses the power of gravity and water to store and generate electricity efficiently.

Water is pumped uphill from a lower storage reservoir to an upper reservoir through underground tunnels using renewable energy sources. This water is then released back down to generate renewable electricity, via power generating turbines, that is stored in large water driven battery.

By using the movement of water to produce renewable energy, it can be stored and used when needed. Another feature is the closed loop system used to move water between the lower and upper reservoir. This means the same volume of water cycled back and forth and there is no net loss of water from pumped hydro.

WaterNSW is pleased to be able to leverage our land and assets to facilitate pumped hydro energy storage projects.

Pumped hydro supports NSW’s 2050 net zero emissions target by replacing fossil-fuel powered electricity with large-scale, reliable renewable energy generation that is available on demand.

A modern energy grid that is powered by renewables should be capable of providing energy on-demand to consumers.

Being able to store energy allows a pumped hydro plant to reduce price spikes and the risk of power-supply interruptions caused by insufficient supply, and with a lifespan 70-100 years, pumped hydro projects can last five times longer than other current battery systems, supporting on-going future power supply.

NSW’s energy system is going through an energy transformation driven by the exit of coal and other emissions intensive generation sources. The NSW Government has signalled that over the next 15 years, four of the five coal fired power stations which currently provide around three quarters of the State’s energy supply, will retire.

Intermittent renewable energy, including solar and wind generation, will in large part replace this generation and will play an important role in helping the NSW Government’s ambitions to reach net zero emissions by 2050. However, the variability of generation from intermittent renewable sources, means that it is not necessarily available on demand.

Investment in complementary forms of short and long duration electricity storage, such as pumped hydro, is therefore important to ensure surplus renewable energy can be stored and to ‘even out’ fluctuations’ in generation. Furthermore, pumped hydro energy storage provides a range of essential network services that may not be able to be provided by intermittent renewable energy sources. These play a critical role in helping to deliver NSW energy consumers a secure and reliable network.

Pumped hydro has long been recognised as both a very efficient and effective part of electricity systems, balancing times of low and high electricity supply from variable energy sources, whilst also assisting grid reliability and stability. This is increasingly important in regions where intermittent renewables (large scale wind and solar farms) produce a large proportion of the region’s electricity consumption.

As more electricity is needed to pump the water up the hill than is produced moving the water down the hill, the facility is a net user of electricity. However, these plants are incredibly efficient (at around 80%) and can be made available in only a matter of minutes, making it very competitive with other energy storage options such as battery storage.

Following a commercial tender process coordinated by WaterNSW, the projects are entirely developed and funded by the private sector developer, not the NSW Government or WaterNSW. The developer manages the environmental assessments and approvals, construction and operation of the project.

WaterNSW used its deep knowledge as land custodians, combined with pre-feasibility studies assessing terrain, geotechnical conditions, environmental factors, and grid connectivity. These critical early steps help identify sites with strong potential for long-duration energy storage projects that could play a major role in powering a reliable, renewable energy future.