Australia’s pumped storage ambition: from vision to delivery

Australia’s electricity system is undergoing its most profound transformation in decades. Rapid growth in wind and solar, combined with the progressive retirement of coal-fired generation, is reshaping system operations and reliability requirements across the National Electricity Market. As dispatchable capacity, system strength and inertia exit the system, the need for firming capacity and long duration storage is structural, rather than optional.

Pumped storage hydropower is central to meeting this challenge. Australia has significant resource potential and a growing pipeline of projects across multiple states. However, only a limited number have progressed to final investment decision, reflecting barriers linked to development risk, long lead times and a lack of revenue certainty. Existing and emerging policy mechanisms, including Long Term Energy Service Agreements and the Electricity Services Entry Mechanism, will play a critical role in determining whether this pipeline translates into delivery.

This session will focus on how to move from ambition to implementation, examining how policy and market frameworks can better support the timely delivery of pumped storage.

Session objectives

• Identify the specific policy and market design changes needed to enable pumped storage projects to reach final investment decision.  
• Pinpoint gaps in existing mechanisms, such as LTESAs and ESEM in NSW, and define how they can be adapted to better support long duration storage across different states.  
• Surface practical solutions to address early-stage development risk and unlock private capital at scale.  
• Draw out concrete lessons from current projects to accelerate timelines from concept to construction.  
• Build a shared set of priority actions for industry and government to progress delivery over the next 12–24 months.