Alinta Energy will scrap its planned $1.8 billion (US $1.26 billion) Oven Mountain Pumped Hydro Energy Storage Project in the north coast of New South Wales (NSW).
The project, supposed to be located near Georges Junction inland of Coffs Harbour, was touted as a 900 mega watt facility that would help the state add more renewables while replacing coal-fired power.
In describing the project, Singapore-owned Alinta Energy said it would work like a “big battery” that would store energy by pumping water more than 600 metres uphill from one reservoir to another.
It was expected to produce enough energy to power 600,000 homes.
An Alinta Energy spokesperson said extensive assessment and development work had gone into the decision to cancel the project.
“Economic and timing challenges on key elements of the project, including a critical transmission line, made it unviable to proceed,” they said.
“This decision follows years of technical studies, planning, stakeholder engagement and project development activities.
“All available options were carefully considered before determining the project was no longer viable to progress.”
The spokesperson said Alinta Energy was grateful to local Indigenous communities, council representatives, suppliers, agencies and other stakeholders who had assisted in the cancelled project.
The scrapping of the project follows other cancellations and withdrawals of pumped hydro projects across Australia.
In November 2024, Queensland’s Pioneer-Burdekin Pumped Hydro Project offered 57 landowners the option of purchasing 58 properties back after the project was scrapped.
Costs Pile Up
The announcement comes as Snowy Hydro announced the cost of its Snowy 2.0 expansion project was now estimated at $22.2 billion, and potentially up to $25 billion.
When the NSW project was announced by the former Liberal government in 2017, its original cost sat at $2 billion.
But Snow Hydro CEO Dennis Barnes said the latest costings may have been greater if the company did not move away from a fixed contract in 2023.
“I have no doubt that moving from a fixed price contract, which was never suitable for such scale, uniqueness and complexity, has protected the project from an even greater cost increase,” he said in a statement.
“It’s also likely that under a fixed price contract, the project would again be stopped under the weight of billions of dollars of claims from the contractor, as it was prior to the reset.”
Does Pumped Hydro Have a Future?
Australian Institute of Progress Executive Director Graham Young said the cancellation of Oven Mountain by Alinta raises important questions about the viability of pumped hydro.
“What Alinta demonstrates is that even though a site might have favourable geography and geology, if it is not in the middle of an electricity network with sufficient capacity to take the electricity, that counts for nothing,” he told The Epoch Times.
Young also questioned the viability of other major hydro projects, including Queensland’s proposed $18 billion Borumba scheme, saying its planned 2,000-megawatt capacity and 24-hour storage duration came at an even higher cost per unit of stored energy than Oven Mountain’s 900 MW, eight-hour design.
He also pointed to the rapid expansion of battery storage, saying Australia’s existing battery capacity could “play the role that was being predicted for pumped hydro” if deployment continued to scale up.
However, Young also cautioned that batteries would need to be replaced every 10 to 20 years, a factor to consider when comparing long-term costs with pumped hydro infrastructure.
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