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Hydropower is the foundation of Australia's net-zero future

After serving as the backbone of the Australian power system for the past 100 years, hydropower is poised to play an integral role in supporting the integration of increased wind and solar generation in the National Electricity Market.

Today, the Clean Energy Council is releasing a new report, 'Hydropower: The backbone of a reliable energy system', which outlines the enormous potential as well as the key challenges that will need to be overcome if we are to deliver the 19 GW of dispatchable energy that will be needed by 2040 to replace retiring coal-fired power stations.

Hydropower can rapidly ramp up its production to meet peak demand when the sun sets and solar output recedes. As the market continues to install higher shares of renewable energy, particularly solar, these kinds of fluctuations can be expected to increase in magnitude, with hydropower playing an increasingly important role in maintaining energy supply reliability.

"Hydropower is one of the most mature forms of renewable generation," says Clean Energy Council Chief Executive, Kane Thornton.

"Its large energy storage capability and the essential system services it provides leave it ideally placed to thrive in a 21st-century energy system to complement the rollout of wind, solar and battery storage and drive the reliable and secure decarbonisation of the Australian energy sector.

"While these projects typically have a high upfront capital cost, investors are willing to spend the money to build new hydropower and to refurbish existing assets. However, to make this investment worthwhile, investors need to know that these projects will recover their investment and receive revenue for the value they provide customers and the energy system.

"Unlocking the full potential of hydropower, therefore, requires market reforms that incentivise these services as well as strategic investment that underpins new investment and critical network expansion and augmentation to ensure strong connection and access to the energy grid."

The International Hydropower Association estimates that the use of hydropower instead of fossil fuels for electricity generation has helped to avoid the emission of more than 100 billion tonnes of carbon dioxide in the past 50 years.

The first Australian hydropower plant was developed in 1895, with most assets built between 1951 and 1996. There is currently around 8.5 GW of hydropower capacity in operation across Australia, providing approximately 6.4 per cent of total energy demand in 2020.

Earlier this month, the New South Wales Government revealed that its $50 million Pumped Hydro Recoverable Grants Program had received 11 GW of proposals or over five times the 2 GW it needs to support wind and solar projects within the state's renewable energy zones. Thornton says that this is further evidence of strong investor appetite under the right policy settings.


For more information or to arrange an interview, contact:

Jane Aubrey
Clean Energy Council Media Manager
[email protected]
+61 409 470 683