Oven Mountain Pumped Hydro Project Scrapped by Alinta Energy

A proposed $1.8 billion pumped hydro project in northern NSW has been scrapped by its developer, Alinta Energy. The 900 megawatt Oven Mountain Pumped Hydro Energy Storage scheme was one of the largest projects within the Armidale Renewable Energy Zone.

An Alinta Energy spokesperson said in a statement that "economic and timing challenges on key elements including a critical transmission line" made the project unviable. This decision follows years of technical studies, planning, stakeholder engagement, and project development activities.

The project was listed for consideration as a state significant development and was progressing through assessment phases with NSW Planning. Alinta Energy thanked traditional owners, landholders, MPs and council representatives, suppliers, key agencies, and many other key stakeholders who contributed their time, knowledge, and feedback throughout the development process.

A pumped hydro energy storage system works by moving water between two dams, with one at the top of a hill and another at the bottom, through a turbine. Energy stored during the day is then released during peak electricity usage at night to maximise profit.

The Oven Mountain project was planned for a site near Georges Junction at the rural hamlet of Carrai, 60 kilometres south-east of Armidale and 75 kilometres north-west of Kempsey. Armidale Shire Mayor Sam Coupland said the decision to scrap the project had left him in shock, with the council only finding out about the decision that morning.

"It seems there are too many environmental hoops to jump through," he said. "That seems to be killing important projects, whether it's this, other renewable energy projects [or] inland rail, take your pick."

"There just seems to be too many hurdles to get through that are imposing a cost that makes these things unviable," Cr Coupland said. The council had worked with developer Alinta Energy for several years to plan roadworks to support the project.

State member for the coastal electorate of Oxley, Michael Kemp, said the decision was a "poor result for the community". "It's a loss for the community on the mid north coast," he said. "This project would have provided significant trades jobs, not only during the construction, but ongoing."

Kempsey deputy mayor and Thunggutti Local Aboriginal Land Council chief executive Arthur Bain said there would be mixed feelings about the loss of the project. "If we think about the site of Oven Mountain, it's perfect for pumped hydro because it is very steep gorge country and it's got the natural falls to generate the electricity," he said.

"On the other hand, its location also makes it unviable economically because it is so isolated," Cr Bain said. A previous hydro project proposed for the site failed in the 1980s.

A director with consultancy group Green Energy Markets, Tristan Edis, said the plummeting battery storage costs had put many large renewable energy projects at risk. "What happened to battery storage is it got a lot cheaper really quickly," he said.

"Pumped hydro is a civil construction, which has gone up quite a bit in cost," Mr Edis said. The cost of building battery storage is now cheaper than pumped hydro.

"A pumped hydro facility to build per kilowatt of output is around $5,000-6,000 per kilowatt, whereas a four-hour battery is about $1,400 a kilowatt," he said. "So, it's almost four times the cost to build pumped hydro."