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The electricity-generation system known as pumped hydro could result in up to $5 billion of investment and up to 3000 jobs over a 10-15-year construction period, Hydro Tasmania chief executive Steve Davy says.

FUTURE: Australian Renewable Energy Agency’s Ivor Frischknecht, left, and Hydro Tasmania’s Steve Davy.

The electricity-generation system known as pumped hydro could result in up to $5 billion of investment and up to 3000 jobs over a 10-15-year construction period, Hydro Tasmania chief executive Steve Davy says.

Mr Davy said the Australian Renewable Energy Agency and Hydro Tasmania would look to pinpoint the best 10-15 pumped hydro sites in Tasmania in feasibility studies formally launched yesterday.

The ARENA funding of $2.5 million for several studies includes $300,000 to prioritise sites which could eventually double the state’s generation capacity from 2500 megawatts to 5000.

The launch was held at Cethana power station in the Mersey Forth scheme where several of the best possibilities are located. Pumped storage is seen as a back-up to the intermittent generation of wind and solar energy which is replacing coal in the National Electricity Market.

Tasmania — with its existing extensive hydro system, new pumped hydro, several more wind projects and a second Bass Strait interconnector — is seeking to become the battery of the nation.

As Federal Government internal debate over a clean energy target continues, Mr Davy said a clear policy direction was important for the renewable industry.

“I think it is inevitable that we are moving towards a low-carbon future and it is very important that we have a clear policy direction,” he said.

“The industry and the business community has called for clarity in terms of that investment climate and we, along with other industry players, have got behind the idea of a clean energy target and we are keen to see this policy resolved soon,” he said.

Mr Davy said he believed pumped hydro would clinch the feasibility of a second interconnector.

He said construction could begin in a year or two after results from studies over the next three months.

ARENA chief executive Ivor Frischknecht said the future of the energy system would revolve around wind and solar systems, which were rapidly getting cheaper.

He said pumped storage was about providing stability when the sun wasn’t shining and wind wasn’t blowing.

“Tasmania is in a good place because it has great storage opportunities but it also has the nation’s best wind resource,” he said.

He said the future of the battery of the nation concept would be known in a year or two as a result of the feasibility studies.

Resources Minister Guy Barnett said pumped hydro could lead to jobs in regional areas.