Budget: Queensland hydro-electric plan setback delivers $1bn bonus

The Crisafulli government has found almost $1bn in savings from delays in the $18bn Borumba pumped hydro scheme ahead of handing down its first budget on Tuesday.

Queensland Hydro is in the exploratory phase of transforming Borumba Dam into a pumped hydro powerhouse. Picture: Christine Schindler

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The Crisafulli government has found almost $1bn in savings from delays in the $18bn Borumba pumped hydro scheme as it prepares to unveil funding for two small-scale projects when it hands down its first budget on Tuesday.

Only an estimated $110.5m of the $935.9m provided towards the two-gigawatt proposed power station southwest of Gympie was spent in the 2024-25 financial year after the Borumba project failed to meet infrastructure delivery deadlines and the regulatory approvals schedule set down by the former Labor government.

The $825.4m in budget savings will assist Queensland Treasurer David Janetzki in his promised move to “lay the foundations for budget repair” and bring down the trajectory of state debt in the Liberal National Party’s first budget in over a decade this week.

Borumba will receive $355.2m over the 2025-26 financial year to continue exploration works at the site as part of a $3bn investment over the forward estimates, down from $8bn in last year’s budget. 

Capital works at the project will continue in tandem with a business case analysis, which the state-owned Queensland Investment Corporation is undertaking as environmental approvals are sought.

Separately, the government will also announce $479m for state-owned corporation CS ­Energy to develop the Brigalow Gas Peaker near Chinchilla as part of its move in increasing reliance on gas for the state’s electricity grid. In May, the government announced nine new gas tenements in central and western Queensland to entice investment to the state.

Queensland Premier David Crisafulli at a community forum near Borumba Dam.

The pullback in taxpayer spending on the Borumba pumped hydro comes after an independent report last year revealed there was a less than 1 per cent chance of any power being delivered by the 2030 first energy deadline outlined by the former government.

It also follows a report by Queensland Hydro, which found the project was three years behind schedule and costs had blown out by $4bn, leaving taxpayers with a total bill of $18bn.

One of the first moves of the Crisafulli government after its October election was to scrap the five-gigawatt Pioneer-Burdekin pumped hydro project, which was slated to be the largest in the world, after the unviable project suffered cost blow-outs, with a revised price tag of $30bn.

The former Palaszczuk Labor government pitched the two projects to voters as the way to transition Queensland’s electricity grid towards 80 per cent renewables and phase out five state-owned, coal-fired power stations by 2035.

Mr Janetzki said the former Labor government’s hydro plans were too costly for Queenslanders. “Labor would never have delivered Borumba Pumped Hydro and its plans for Pioneer Burdekin were a hoax that would have cost taxpayers $36.8bn,” he aid. “We promised to fund smaller, more manageable pumped hydro projects, and we are delivering on that promise.”

The budget will fulfil the Crisafulli government’s pledge to move away from large-scale projects towards smaller, “more-manageable” pumped hydro power stations and gas investments, which will be delivered by state-owned corporations in partnership with the private sector.

CleanCo will be provided $50m in the acquisition of the 2GW Mount Rawdon pumped hydro, southwest of Bundaberg, and a further $29m for Stanwell to invest in the 400MW Big T project at Cressbrook, northwest of Brisbane.

CS Energy will continue to investigate the proposed 750MW Capricornia project, 80km west of Mackay.

The Queensland government-owned Stanwell will continue to investigate the proposed Lockyer Energy Project near Gatton, in collaboration with specialist renewable and energy storage investment manager Quinbrook.

A proposed gas turbine at Swanbank is being examined by CleanCo.

Mr Janetzki was criticised upon the eleventh-hour release of his pre-election costings last Oct­ober for failing to assign a single dollar towards pumped hydro.