A $1.8 billion pumped hydro project meant to steady the New England’s power supply is dead, and Armidale and Kempsey are both feeling the loss.
Alinta Energy has discontinued work on the Oven Mountain Pumped Hydro project, with the rapidly escalating costs affecting the sector broadly combined with delays to a critical transmission line given as the reason.
“Following extensive assessment and development work, we have made the difficult decision to discontinue work on the Oven Mountain Pumped Hydro project,” Alinta Energy said.
“Economic and timing challenges on key elements of the project, including a critical transmission line, made it unviable to proceed.”
The Oven Mountain project did not need the massive new transmission line planned between Muswellbrook and Armidale which is the cause of much debate at the moment. Instead, just 15km of line was to be built to link it to Line 965, the existing power line between Armidale and Kempsey. The connection was to include a substation, access roads, and transmission lines rated up to 330 kV. A separate application was planned for an upgrade of the existing section of Line 965 between the project and Armidale.
It is understood it was an EnergyCo decision to not connect the project to the existing transmission line in a timely manner, making the project unviable. EnergyCo and the NSW Minister for Energy Penny Sharpe have been asked to explain what has happened with Line 965’s connection and upgrade, and have not responded at the time of publishing.
Member for Oxley Michael Kemp blamed the NSW Government for the failure and said the decision was a devastating loss for the Macleay Valley, wiping out the prospect of hundreds of jobs and a major boost to the regional economy.
“This is a massive opportunity lost for Kempsey, and it comes down to the failure to deliver the infrastructure needed to make the project work,” Mr Kemp said.
“We’re talking about hundreds of jobs, work for local tradies and contractors, and money flowing through our local economy.”
It is normal for some renewable projects to be withdrawn early, before they reach the environmental impact stage. Little money has been spent by then, and any number of factors can lead a company to walk away. That was the case with Origin’s Skye Ridge and Squadron’s Boorolong wind farms, which ended when each company was rationalising its portfolio in the face of rising costs in the sector – both projects remain potentially viable.
Oven Mountain is different. The 900 MW project had been declared Critical State Significant Infrastructure and went out for public comment in 2023. It was at the assessment stage of the state significant planning process. On paper, it had a small impact and a massive upside for stabilising power production in the region’s renewable energy zone (REZ). Projects generally do not get cancelled this far in unless something has gone very wrong, and everything has been tried to find a way forward.
Mr Kemp made clear that his community wanted this project.
“The jobs, opportunities, and economic benefits for our region were real,” Mr Kemp said.
“At a time when families and businesses are battling the cost of living, we’ve also lost the opportunity for a major energy storage project that could have helped put downward pressure on electricity costs.”
Mr Kemp also pointed to public money already committed.
“$10 million in public funding was committed to Oven Mountain through the NSW Government’s recoverable grants program and $951,000 from the Australian Renewable Energy Agency,” he said.
“That is taxpayers’ money spent supporting a project that will now not go ahead.”
In Armidale, the mayor said the news left him in shock. He questioned whether state and federal planning rules had become too onerous.
“That seems to be killing important projects, whether it’s this, other renewable energy projects [or] inland rail, take your pick,” said Armidale Regional Council Mayor Sam Coupland.
“There just seems to be too many hurdles to get through that are imposing a cost that makes these things unviable.”
Mayor Coupland said the council had worked with Alinta Energy for several years to plan roadworks to support the project.
“That Kempsey-to-Armidale Road restoration project is the biggest engineering undertaken by any council ever in NSW,” he said.
On the same day, at the other end of the state, the much larger Snowy Hydro project was also reporting blowouts in cost and timelines, and former Prime Minister Malcolm Turnbull was making similar comments to that of Sam Coupland.
“I don’t think this is an issue about pumped hydro, good or bad. It’s certainly not an issue about [electricity] storage, good or bad,” Mr Turnbull told the AFR.
“Most of these big infrastructure projects are blowing their budgets, and I think we need to ask ourselves why.”
“We need to find out why it is so expensive to build infrastructure in Australia,” he said. “I think part of the problem may be that we don’t build enough of it.”