Australia’s energy storage buildout is increasingly defined by a geographic and technological split. In New South Wales, the state government has elevated two pumped hydro proposals totaling 1.8 gigawatts to priority planning status, even as battery energy storage systems continue to dominate deployment elsewhere in the country.
The projects, developed by Zen Energy and Acen Australia, have been declared Critical State Significant Infrastructure, a move intended to compress assessment timelines rather than guarantee final approval.
The designation covers Zen Energy’s proposed 1 gigawatt Western Sydney Pumped Hydro project at Lake Burragorang and Acen Australia’s 800 megawatt Phoenix Pumped Hydro project near Mudgee. Together, the facilities are designed to provide up to 31 hours of combined long duration storage, positioning them as firming assets for a grid that is rapidly shedding coal capacity. New South Wales has committed to delivering 16 gigawatts of new renewable generation by 2030 and 42 gigawatt hours of long duration storage by 2034, targets that implicitly assume technologies capable of sustaining output across multi day weather events.
Pumped hydro’s policy appeal in New South Wales stands in contrast to its recent track record. The state’s flagship project, Snowy 2.0, has become a cautionary reference point after costs escalated from an initial estimate of about AUD 2 billion to more than AUD 12 billion, with completion now forecast for late 2028 rather than 2021. Those overruns have reinforced investor concerns around construction risk, geological uncertainty, and long development timelines, all of which weigh heavily against pumped hydro when compared with batteries that can be delivered within two to three years.
New South Wales Energy Minister Penny Sharpe has framed pumped hydro as structurally necessary for a system moving beyond coal. The argument hinges on duration rather than response speed. While batteries excel at frequency control and peak shifting, they remain capital intensive for storage durations beyond four to six hours. Acen’s Phoenix project, which has already secured a Long Term Energy Service Agreement under the state’s Energy Roadmap, is proposed with up to 15 hours of storage, while Zen’s Western Sydney project targets up to 16 hours. In theory, these assets could support renewable energy zones during extended periods of low wind or solar output, a role batteries struggle to fill economically at scale.
On the opposite side of the country, Western Australia is doubling down on batteries as its primary firming solution. RE Development Pty Ltd has submitted a development application for a 250 megawatt, 1,000 megawatt hour battery energy storage system in Baldivis, south of Perth. The AUD 500 million project is designed for four hours of discharge and will connect directly to the South West Interconnected System using existing 330 kilovolt transmission infrastructure operated by Western Power. The proximity to high voltage lines materially reduces connection costs, a factor that continues to tilt economics in favor of batteries.
The Baldivis proposal aligns with warnings from Australian Energy Market Operator that the SWIS faces heightened reliability risks within five years without additional firming capacity. Rapid rooftop solar uptake, now exceeding 400,000 installations or roughly 40 percent of households in Western Australia, has intensified midday oversupply and evening peak challenges. Large scale batteries are increasingly being positioned as a corrective measure, capable of absorbing surplus solar generation and delivering fast response support during demand spikes.
Western Australia’s planning trajectory also reflects shorter investment horizons. The Baldivis battery is expected to be built within 12 months and operate for around 15 years, a markedly different risk profile from pumped hydro projects that can take a decade to permit and construct but are designed to operate for half a century or more. Recent completions, including Synergy’s 2,400 megawatt hour battery at Collie, underline how quickly battery capacity can be deployed when approvals and grid access are aligned.
