Is pumped hydro a solution for Australia's mine voids?

An independent think tank warns taxpayers may be put at risk.

Amidst proposals in Australia to repurpose sites for open-pit mining into pumped hydro energy storage facilities, the Institute for Energy Economics and Financial Analysis (IEEFA) warned about technical, environmental, and financial risks these projects have. 

According to IEEFA, the Australian mining sector is currently facing a challenging task as it looks for solutions to make sure of voids left by mining. 

In April, Zen Energy announced its proposal to convert degraded coal industry land at Nattai on the escarpment above Lake Burragorang into a one-gigawatt Western Sydney Pumped Hydro project.

IEEFA’s report entitled “Filling the voids: Pumped hydro proposals could see taxpayers financing mine rehabilitation” noted that pumped hydro has a history of delays and cost-blowouts, and projects implemented in mine voids could also entail severe contamination risks.

Moreover, these projects could establish a precedent of governments subsidising mine site rehabilitation, a responsibility traditionally borne by mining companies, the think tank emphasised.

“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,” said Anne-Louise Knight, lead analyst, Coal Industry Australia at IEEFA and the report’s author.

IEEFA’s analysis also found that these projects may not give a significant impact on Australia’s energy system since most of the schemes proposed for mine voids only offer medium-duration storage. 

Knight pointed out that there is little to no requirement in the National Electricity Market for the pumped hydro proposed in mine voids. It appears that such proposals only attempt to find a suitable post-mining use for mine voids rather than to fill the energy storage requirements, she added.

“Currently it is unclear what the rehabilitation strategies are for these giant holes dotted across the country,” said Knight. “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.”