$4bn blowout: Major pumped hydro project over time and budget

A major project needed to reach the former Labor government’s renewable energy goals has blown out by $4bn and won’t be ready until after the 2032 Olympic and Paralympic Games.

Images from the Initial Statement Advice report into the proposed Borumba Dam pumped hydro plant.

A major pumped hydro project central to reaching the former Labor government’s renewable energy goals has blown out by $4bn and won’t be ready until after the 2032 Olympic and Paralympic Games.

A newly-released Queensland Hydro briefing paper has revealed the 2.4GW Borumba Pumped Hydro project near Gympie will cost $18.4bn — up 30 per cent from the most recent estimate of $14.2bn.

First power also won’t be drawn from Borumba Pumped Hydro until July 2033, instead of the originally forecast February 2032 — meaning Queensland will not meet its renewable energy targets.

Overall, Queensland Hydro found there was a measly 1 per cent chance of the project being ready under the former government’s timelines.

Treasurer and Energy Minister David Janetzki has flagged the need to “work out a way forward to save the project”, with Queensland Hydro outlining how altering the size and capacity of the project would substantially reduce costs.

Borumba Pumped Hydro has blown out by $4bn.

The LNP, as one of its first acts of government, scrapped Labor’s controversial 5GW Pioneer-Burdekin Pumped Hydro project. They’ve promised instead to build smaller pumped hydro projects, though there is no timeline, cost or locations associated with this plan.

Premier David Crisafulli, in the lead up to the election, repeatedly stated he was confident Borumba Pumped Hydro could be built for less than the $14.2bn quote by Labor.

Deputy Opposition Leader Cameron Dick denied any knowledge of the Borumba Pumped Hydro cost blowout before the election.

He also refuted any suggestion the former Labor government had jumped the gun in legislating renewable energy targets that were unachievable, considering Pioneer-Burdekin was ultimately deemed unviable and Borumba is significantly delayed.

“Not at all, I think the Queensland Energy and Jobs plan delivered exactly what Queenslanders want, a reduction in emissions, real action on climate change and a real plan to deliver renewable energy for this state, which has been absolutely trashed by the LNP,” Mr Dick said.

Mr Janetzki will meet with Queensland Hydro executives on Thursday to hash out a way forward.

The new Treasurer called Labor’s energy policy a “house of cards waiting to collapse”.

“The report shows the former Labor Government’s timing and costings were pie in the sky. They might as well have been made up entirely,” he said.

Images from the Initial Statement Advice report into the proposed Borumba Dam pumped hydro plant.

“The Government will deliver an energy policy guided by engineering and economics, not ideology.

“Our energy policy will always be grounded in reality, on cost, time frames, and delivery.”

The Queensland Hydro briefing shows skyrocketing labour and material costs caused a third of the recent $4.2bn blowout.

Environmental offsets, the need to build a better workers camp, time delays, extra workers, insurance and project costs were among the other factors behind the cost increase.

Queensland Hydro, in its report, stated there was an “opportunity for government” to consider an alternate design for the project to deliver best value for cost, reliability and electricity generation capacity.