Pioneer-Burdekin pumped hydro passed on by LNP as emissions targets walked back by federal opposition. Will it hurt or help investment?

Queensland’s biggest-ever renewable energy project has been rejected by the LNP in the same week the federal opposition walked away from its 2030 emissions reductions target. Will it hurt or help investment?

View of the Pioneer Valley, where the Pioneer-Burdekin pumped hydro project is planned. Picture: Queensland Hydro.

The biggest difference between the LNP and Labor heading into the new election is whether or not Queensland’s biggest, most ambitious renewable energy project will move forward or be dead in the water.

Opposition leader David Crisafulli’s budget reply speech bombshell that the LNP would not move forward with the Pioneer-Burdekin pumped hydro scheme — first costed at $12bn but now believed to cost as much as $20bn — cuts a massive hole into the state’s emissions reductions plans.

The party has not completely rejected pumped hydro however. LNP energy spokeswoman Deb Frecklington said the party would conduct a series of investigations for potential pumped hydro sites, but refused to reveal how many sites were being considered and their locations.

She said the LNP will pursue both private and state-owned renewable energy projects.

Grattan Institute director Tony Wood said private-public partnerships often work well with energy projects, with the trade-off the government has less control over the systems.

“I would rather see the government’s role as setting up the policies, regulatory systems and then getting the private sector to provide the money.”

There is fierce, organised local opposition to the Pioneer-Burdekin pumped hydro project, with fears for its environmental impacts. Picture: Harry Bruce

Speaking on the significance of cancelling the 5,000MW project, Mr Wood said, “It’s the equivalent of five reasonably sized coal fired power stations”, though he clarified that is a maximum output, not a consistent one.

“Batteries are good for short term storage, but pumped hydro is the most popular and economic option for longer periods,” Mr Wood said.

The timeline for the construction, according to the Queensland Energy and Jobs Plan, meant it would be operational by 2032 (first stage) with the second stage finished by 2035, giving the government confidence in shutting off its coal fired power plants.

Just as the federal opposition has not revealed where it plans on building nuclear power stations, the Queensland LNP gave no details on the alternative sites it would put pumped hydro in.

There are already other pumped hydro sites identified by the Miles government, though the locations were kept hidden in a report.

There were more than 40 alternative large-scale pumped hydro sites considered before the government selected Pioneer-Burdekin and Borumba. Picture: Queensland Hydro Study

The LNP remains committed to the 2035 target of 75 per cent emissions reductions in Queensland — which the Pioneer-Burdekin project is crucial for, according to the Queensland Hydro Studies report. Because of its unique size and elevation, you would need to build three large scale projects to match its capacity.

When asked whether it’s possible to build three or more on the same timeline as Pioneer-Burdekin, Mr Wood said it both increases potential issues, but diversifies some of the risk.

“These things tend to be much harder and take longer than people hope for.

“No matter what work you do in preparation, when you start digging holes in the ground things can go wrong.”

He noted that while smaller projects will typically be less prone to problems than major infrastructure works.

Mr Crisafulli said he didn’t believe the Pioneer-Burdekin hydro project could be delivered.

“It’s a difficult argument for the government to say that they have a tangible scheme set with a project that needs to be online within the next decade, and yet, they don’t want to put money in the budget,” he said.

“Either they spent a billion dollars on a brochure, or there’s $20 billion tucked under the pillow but either way it spells pain for Queensland’s when they pay the electricity.”

Speaking in parliament, Queensland energy minister Mick de Brenni said the cancellation of the project is effectively a cut to 3000 local construction jobs in Mackay.

“The Pioneer-Burdekin Pumped Hydro energy scheme will generate 120,000 megawatt hours, enough to almost replace Queensland’s entire coal fired fleet,” he said.

“Without Pioneer-Burdekin, the LNP cannot stop burning coal. They cannot cut emissions. They would risk $430bn in investment and 145,000 jobs across Queensland.”

When was asked whether the cancellation sent the wrong message to investors, Mr Wood said industry investment looks not for certainty but predictability.

“Every time we change the rules that means more uncertainty.”

He said this was seen clearly at the federal level, where this week opposition leader Peter Dutton announced the Coalition was scrapping its interim 2030 emissions reduction target.

“The opposition has itself in a very difficult position. We have legislated 2030 targets and international commitments which are legally binding due to the Paris Agreement,” Mr Wood said.

“Industry said wait a second — you changed the rules again?

“It doesn’t mean the PM goes to jail if we don’t meet them, but typically means we are severely embarrassed on the world stage, and there’s tough conversations with investors.”

If we’re not meeting the interim targets, the 2050 targets become significantly harder to meet, as the greenhouse gases accumulate, they don’t disappear, Mr Wood said.

“The real target which is forgotten is the carbon budget for the decade to 2030.”

Mr Wood said the people running Australia’s biggest companies understood the science of climate change —which wasn’t the case 20 years ago — and wanted to invest with confidence.

This title contacted Queensland Hydro following Mr Crisafulli’s announcement, asking how many staff were currently working on the Pioneer-Burdekin project, and what it meant for employment numbers if it was cancelled. We did not receive a response prior to publishing.

Mr Crisafulli was also asked whether his government would build three large-scale pumped hydro projects to replace Pioneer-Burdekin, or many more smaller ones.
He was also asked whether cancelling the project would impact private sector investment into Queensland’s energy industry.