Victorian hydro scheme to play bigger role in green power shift

Victoria’s largest hydropower scheme will undergo a $40 million expansion to boost the state’s capacity to back up renewable energy,shore up the grid in all weather conditions and avert the threat of blackouts and rising power bills.

A series of coal-fired power plant failures and soaring electricity prices have thrown the east-coast energy market into turmoil this year,prompting the Australian Energy Market Operator (AEMO) to call for more urgent investments in plants that can store and dispatch power when it’s needed the most,such as batteries and hydropower.

Simon Kelley,AGL’s head of hydro,at the Clover power station in Mt Beauty.

Simon Kelley,AGL’s head of hydro,at the Clover power station in Mt Beauty.Eddie Jim

AGL,Australia’s largest power generator,said on Monday it will go ahead with a significant upgrade to the 395-megawatt Kiewa hydro scheme on Mt Beauty in Victoria’s Alpine region.

Ahead of the announcement,AGL chief operating officer Markus Brokhofsaid the project would increase the capacity of the scheme’s Clover power station by 14 megawatts.

“Clover is the oldest station in the Kiewa scheme and was commissioned in 1945,” he said. “By making this targeted investment,we are able to increase the efficiency of the station and broader scheme to deliver more reliable,clean energy.”

Hydropower,which uses flowing water to spin turbines connected to generators,is seen as a vital technology for integrating the projected nine-fold increase in wind and solar power that authorities say is required to decarbonise the fossil fuel-dominated electricity grid while keeping electricity reliable and affordable.

The Clover hydropower station in Mt Beauty.

The Clover hydropower station in Mt Beauty.Eddie Jim

The Kiewa scheme uses water stored in dams,and usually ramps up to meet Victorians’ increased levels of demand in the evenings,when the sun sets and output from solar farms and rooftop solar panels recedes.

While AGL’s hydroelectricity accounts for only about 2 per cent of the state’s overall power consumption,Brokhof said it played an important role in providing “crucial support to the electricity system in the event of peak demand periods or other generator outages”.

AGL is aiming to complete Clover’s upgrade by 2026. The company forecasts it will increase the plant’s throughput from 120 megalitres an hour to 140 megalitres an hour,expanding the entire Kiewa scheme’s ability to run at capacity.

Commenting on AGL’s plan to upgrade the scheme,Victorian Energy Minister Lily D’Ambrosio said investing in clean energy capacity was vital to delivering the state’s target of cutting greenhouse gas emissions in half by 2030.

“We welcome investments like this from AGL,helping us create jobs and delivering a more affordable and reliable energy system for regional Victoria,” D’Ambrosio said.

AEMO,which manages power and gas markets across the country,has spent the past two years consulting 1500 stakeholders to deliver its “Integrated System Plan” to show what it expects the energy grid will look like out to 2050.

The report said it expected 60 per cent of the eastern seaboard’s coal fleet to exit the electricity grid by 2030 while all Victoria’s brown coal-burning power stations could close by 2032.

AEMO chief executive Daniel Westerman said this would require a tripling of the back-up capacity from alternative sources to coal,such as utility-scale batteries,fast-start gas plants and hydro storage,which could be on standby to back up renewable energy when the wind isn’t blowing and the sun isn’t shining.

“It is urgent,but it is achievable,” Westerman said. “We need to act now.”

While AGL is a major investor in renewable energy,it is also the nation’s single biggest greenhouse gas emitter because it still generates by far the bulk of its electricity from coal-fired power plants. The company has come under greater pressure from climate activists and its own shareholders to spend more on clean energy and bring forward the closure dates of coal assets,the last of which is not scheduled to close until the mid-2040s.

Last month,AGL’s chairman and chief executive were forced to resign after dumping long-held plans for a demerger of its generator and retail arms following a campaign led by the tech billionaire investor Mike Cannon-Brookes,who wants to keep AGL whole and bring forward its exit from coal to the mid-2030s.

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Nick Toscano is a business reporter for The Age and Sydney Morning Herald.

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