Reality check welcome on hydro

New Queensland Premier David Crisafulli has done taxpayers a service and set a welcome example by following through on his promise to axe the world’s biggest proposed pumped hydro scheme. The decision brings a reality check to his Labor predecessor’s reckless embrace of renewable energy projects without proper due diligence to meet overly ambitious targets. Queensland Labor announced the Pioneer-Burdekin pumped hydro project in 2022 before it had been subjected to any detailed financial, engineering and environmental investigations. More than 50 cattle and sugar properties were resumed to make way for the dam, and negotiations that could lead to their return to former landowners now will start.

Community disruption is only part of the story. Pumped hydro is considered to be a big segment of the renewable energy story because it can provide backup power for longer periods than batteries. But the experience with delays and cost blowouts on the Snowy Hydro 2.0 project underscores the engineering complexities involved. The same is true for hydrogen, which proponents now admit is proving difficult at scale. Major potential investors have pulled back on hydrogen and it is likely the technology will take longer to develop and have a more limited use than had been enthusiastically proposed. As we report in Inquirer on Saturday, there are similar issues with offshore wind, which, like hydrogen and pumped hydro, has been touted as a big piece of the solution to decarbonising the energy system. Leaving aside the intermittent nature of offshore wind, it has become obvious that costs will be much higher than anticipated, particularly for floating wind turbines that will be necessary for any developments off the NSW coast. Governments and offshore wind developers overseas have been stung by rising costs and technological failures.

The discussion in the US is that the cost of offshore wind should be compared with the cost of new-build nuclear. This is all relevant to the discussion that must be had about nuclear in Australia. Big tech is voting with its wallet on nuclear because of the vast amounts of electricity that will be needed to power its artificial intelligence ambitions. A change of government in Queensland has provided an opportunity for a stocktake. Many in the renewable energy industry will complain that this will lessen investment certainty. This may be true. But the bigger need is that energy users and government will have certainty about what any new technologies, including nuclear, will cost and whether they are capable of delivering as promised.