AGL buys two pumped hydro projects owned by Malcolm Turnbull in the NSW Hunter

The deal allows AGL to expand its pipeline of potential long-duration projects that it will need to develop to replace coal in NSW. But how much former Liberal leader Malcolm Turnbull pocketed in the sale is unclear.

Former Prime Minister Malcolm Turnbull during a visit to Snowy Hydro in Cooma. Picture: Alex Ellinghausen/Fairfax/POOL

Former Liberal leader turned climate entrepreneur Malcolm Turnbull has sold two early-stage pumped hydro projects in the NSW coal capital to AGL Energy.

The dual projects in the Hunter Valley region were purchased from Upper Hunter Hydro Top Trust and its trustee, owned by Mr Turnbull, for an undisclosed sum.

The deal will allow the Mike Cannon-Brookes backed AGL to expand its so-called long duration pipeline as it moves away from coal in a protracted decarbonisation plan. It is scheduled to have shut all of its coal power stations by 2035, and while it is moving ahead with adding batteries, it will still need facilities that can run for longer than 4-6 hours.

Unlike rivals such Origin, AGL does not own a large gas power station fleet, though it does have aspirations to bolster its interests.

Former PM Malcolm Turnbull is a believer in pumped hydro. Picture: Alex Ellinghausen/Fairfax/POOL

AGL will now own the proposed Glenbawn Dam, which could provide 770MW of power and the 623MW Glennies Creek. Both, if developed, could provide 10 hours of storage. Further approvals will be required to get both sites to their full potential.

Markus Brokhof, AGL’s chief operating officer, said the projects are enticing.

“This acquisition adds to AGL’s growing development pipeline. The project has favourable topography and is located in the Upper Hunter NSW, continuing our ongoing commitment to the economy in the Hunter region,” said Mr Brokhof.

AGL has a long history in the Hunter Valley. It shut its Liddell Coal Power station in 2023 and is building a large-scale battery on the site.

Pumped hydro involves the pumping of water uphill during periods of ample electricity supplies, before being released when there is a surge in demand.

But developing pumped hydro is prohibitively expensive, and developers are urging the government to include such long-duration projects into Labor’s signature capacity investment scheme.

Mr Turnbull said AGL will accelerate the development of the projects, which he described as critical if Australia is to transition away from coal.

“Long duration storage will play a critical role in Australia’s future energy system, helping to keep the grid reliable by shifting renewable energy to match consumer demand,” said Mr Turnbull.

“The Glenbawn and Glennies Creek projects are well placed to create jobs and drive investment in the Hunter which plays a pivotal role in the energy transition,” he said.

Mr Turnbull is a long-term supporter of pumped hydro. Under his tenure as prime minister, the government committed to underwriting the expansion of Snowy Hydro, which has since been beset by cost blow-outs and delays.

In a bid to accelerate Australia’s transition away from coal, Labor in 2023 promised to underwrite a massive expansion of 32GW of new wind, solar and battery projects.

The so-called capacity investment scheme offers developers guaranteed minimum returns on new solar and wind projects. Under the scheme, should the wholesale electricity price fall below an agreed threshold, taxpayers will compensate the renewable energy project.

Should the wholesale electricity price exceed an agreed metric, developers pay the government. The design removes revenue risk from developers and accelerates much-needed investment.

The scheme is designed to allow Labor to meet its target of having renewable energy generate 82 per cent of the country’s power by 2030, and meet legislated targets to reduce carbon emissions by 43 per cent.

While the deployment of renewables has accelerated, energy officials have warned the country is susceptible to issues around what will back up the grid during periods when conditions are unsuitable for solar or wind.

Gas would typically be the back-up but Labor – under pressure from states such as Victoria – has resisted government underwriting of the fossil fuel source.

Mr Turnbull is a co-investor with his wife Lucy.

Last year, Upper Hunter Hydro was granted access to the Glenbawn Dam, 10km east of Scone, and Glennies Creek Dam, which is 28km north of Singleton, by WaterNSW.

AGL, meanwhile, could build a gas power station in every state across Australia’s east coast over the next 10 years to supplement renewable energy generation, the company’s chief executive Damien Nicks said earlier this year.

Originally published as AGL buys two pumped hydro projects owned by Malcolm Turnbull in the NSW Hunter