Pumped hydro energy storage (PHES) is an important part of ensuring continuous electricity supply in Australia’s renewables transition.
Pumped hydro projects are being proposed as a post-mining use for the large holes left after open-cut mining, but new research from independent think-tank the Institute for Energy Economics and Financial Analysis (IEEFA) suggests governments—and taxpayers—should be wary.
Related article: Pumped hydro: a vital part of Australia’s renewable energy storage solution
As the Australian mining sector sets its sights on making use of the voids left by mining, one widely suggested option is to convert these sites to pumped hydro facilities that would provide energy storage for the electricity grid.
However, a new report IEEFA highlights the technical, environmental and financial risks these projects could pose. Pumped hydro has a history of delays and cost-blowouts, and projects implemented in mine voids could also entail severe contamination risks.
The report, Filling the voids: Pumped hydro proposals could see taxpayers financing mine rehabilitation, also warns of the possibility these projects would effectively set a precedent of governments partially funding the rehabilitation of mine sites—a responsibility that should sit with the mine operator.
IEEFA lead analyst Anne-Louise Knight says, “Rehabilitating mine sites is a legal obligation miners enter when their mining licences are approved, and they should be budgeting for this ahead of the mine’s closure. IEEFA’s research raises concerns that proposals to build pumped hydro in these final voids may potentially be a way to get governments to share some of that financial burden, with taxpayers ultimately losing out.”
Mine sites with pumped hydro potential identified in ANU Study (QLD, Vic, NSW)
| Mine Name | State | Mine Type | Mine Status | Majority Owner |
| Site identified Northeast of Goonyella and Broadmeadow coal mines | QLD | Coal | ||
| Site south of Centurion Coal Mine (AKA North Goonyella) | QLD | Coal | Operating, scheduled closure 2023, applying for extension | Peabody |
| Coppabella Coal mine | QLD | Coal | Operating, 2027 | Peabody |
| Muswellbrook mine | NSW | Coal | Closed since 2022 | Idemitsu |
| Hunter Valley Operations | NSW | Coal | Scheduled to close north pit June 2025, south pit 2030, but applying for expansion | Glencore |
| Lake Liddell | NSW | Coal | Closed 2023 | Glencore |
| Mount Owen Glendell (south part) |
NSW | Coal | Scheduled for closure 2025, last coal Dec 2024, but applying for extension | Glencore |
| Mount Rawdon gold mine | QLD | Gold | Mining ending 2024, ore processing ending 2025 | Evolution Mining |
| Ernest henry Mining | QLD | Gold / copper | ||
| Cadia valley Mine North | NSW | Gold / copper | Operating | Newcrest |
| Cadia valley mine South | NSW | Gold / copper | Operating | Newcrest |
| New Century Mine | QLD | Zinc, Lead, silver | Sibanye-Stillwater Group | |
| Gold Coast Wake Park, water recreation park (west of a quarry) |
QLD | NA | NA | – |
| Loy Yang (north) | VIC | Coal | Operating, scheduled closure date 2035 | AGL Energy |
| Yallourn coal mine | VIC | Coal | Operating, scheduled closure date 2028 | Energy Australia |
| Hazelwood cooling pond | VIC | Coal | Closed in 2017 | ENGIE (72%) & Mitsui & Co Ltd (28% |
Along with the risks, IEEFA’s research found these projects are unlikely to deliver significant benefits for Australia’s energy system. While large-scale, strategically placed pumped hydro such as Snowy 2.0 could play an important role providing deep energy storage to complement renewable electricity generation, most of the schemes proposed for mine voids only offer medium-duration storage.
Analysis of projected storage requirements in the National Electricity Market (NEM) suggests demand for these specific projects will be limited, and might be met more competitively by alternative technologies.
Knight says, “There is little to no requirement in the NEM for the pumped hydro proposed in mine voids. The primary driver for pumped hydro proposals in mine voids appears to be an attempt to find a suitable post-mining use for mine voids rather than to fill the energy storage requirements in the NEM.”
The report argues that if final voids are permitted to be left after mining, Australia needs a clearly defined policy that sets out the obligations of mining companies to rehabilitate or repurpose mine pits to avoid significant financial burden on the taxpayer.
Related article: Muswellbrook Pumped Hydro named critical infrastructure
“Currently it is unclear what the rehabilitation strategies are for these giant holes dotted across the country,” Knight says.
“Governments must ensure companies meet their obligations in managing the ongoing risks these structures pose, while ensuring that taxpayers are not left to pick up the bill.”
