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Pumped hydro energy storage (PHES) constitutes most energy storage worldwide. When electrical energy is plentiful and cheap, it is used to pump water from a lower reservoir to a nearby upper reservoir through a pipe or tunnel. During periods of peak demand, when electricity is expensive, the pumped water is released downhill through a turbine to generate electricity (see Figure 1). About 80% of the electricity used to pump the water uphill is recovered, and 20% is lost.

Australia already has river-based pumped hydro energy storage facilities at Wivenhoe, Shoalhaven and Tumut 3. Construction of Snowy 2.0 has commenced—this project would add 2,000 MW of generation to the National Electricity Market (NEM) and provide about 175 hours of storage. The Kidston pumped hydro scheme in an old gold mine in Far North Queensland has received Northern Australia Infrastructure Facility (NAIF) funds. A further six pumped hydro energy projects have been shortlisted in the Underwriting New Generation Investments program.
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