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Energy Storage

Underground Pumped Hydro Energy Storage

In Lake Macquarie, R&D work is being undertaken into the use of underground coal mine workings as a lower reservoir for pumped hydro energy storage (UPHES). The research aligns with one of the five foundational pillars of the NSW Electricity Infrastructure Roadmap - long duration storage. Projects such as UPHES will support NSWs move to a cleaner, cheaper and more reliable future energy system. The viability of UPHES will be further understood towards the end of 2021.


This Project is made possible by funding from NSW Emerging Energy Programme & ARENA.

For more information check out our Stakeholder Engagement Page:

Pumped Hydro Energy Generation


  • What is Underground Pumped Hydro Energy Storage (UPHES)?
    In its simplest form, UPHES is a battery. It is not a new technology and in fact is probably the most abundant and mature form of long-term energy storage in the world. Dropping water from a high elevation to a low elevation has a lot of in-built energy. If this water is dropped through a turbine, that in-built energy can be captured and then exported as electricity. If the water is moved from an upper reservoir to a lower reservoir it provides the opportunity for a closed loop system, with minimal water losses. If the water is then pumped back to the upper reservoir during abundant, clean energy power times (eg when solar is plentiful), the pumped hydro system essentially becomes a storage of that solar power which can be dispatched when the sun is not as plentiful.
  • How does UPHES fit into the electricity market?
    For decades, NSW has relied upon coal fired power stations to provide cost effective and reliable electricity. However, in the next 15 years 4 out of the 5 existing coal fired power stations in NSW are scheduled to retire. Consequently, significant new electricity sources and infrastructure are needed to ensure NSW continues to access affordable and reliable electricity, that also respects the change towards lower carbon electricity. Reliability will come from being able to deliver electricity when the market demands it, which is not always aligned with when the sun is shining or the wind is blowing. Batteries are a key enabler in providing reliable or “firm” power. In its simplest form, UPHES is a battery, and consequently can deliver the firm power that a reliable, clean electricity market requires. The NSW government recently announced its Electricity Infrastructure Roadmap; a coordinated framework to deliver a modern electricity system for NSW. It is a whole of system approach to deliver new generation, transmission, long duration storage and firming. UPHES features prominently in the Roadmap, with the potential development of up to 2GW of UPHES.
  • What is the Project?
    The Project is assessing whether old underground coal mines can be used as a lower water reservoir for a UPHES. It is referred to as UPHES – underground pumped hydro energy storage. UPHES is considered a first-of-kind, and as such has several questions to answer to validate the concept. Consequently, the initial focus of the Project is on research and potentially a pilot-scale trial, to see how coal seams react to water movement, and to determine what types of infrastructure and technology may be needed. If the initial research and pilot work show an encouraging outcome, the focus will then move towards designing and assessing something of larger (commercial) scale.
  • Where is the Project located? Why Lake Macquarie region?
    The research and assessment will be undertaken at Newstan Colliery, Fassifern NSW. Newstan Colliery is owned by Centennial Coal Company Pty Limited, a sister company of Banpu Energy Australia. The Lake Macquarie region is home to NSW’s largest capacity coal fired power station, Eraring and numerous coal mines that have supplied fuel for it and its predecessor Wangi Power Station. As such, there is significant electricity distribution and transmission infrastructure already in place, as well as considerable underground mining voids. Eraring is scheduled to retire around 2032; a viable and feasible CMUPHES could become a natural electricity supply transition for Lake Macquarie. This would create a low carbon electricity hub in line with the NSW Government’s touted Hunter Renewable Energy Zone.
  • Who is providing the research?
    The research team comprises academics from the University of Newcastle, specialist underground coal mining consultants Byrnes Geotechnical and hydroelectric engineers from GHD. The research team is led by a highly experienced mining engineer from Banpu Energy.
  • Who is Funding the Project?
    The Project is being funded by three parties; Banpu Energy Australia Pty Ltd (BEN), with Centennial Coal. Centennial Coal (Centennial) owns the Newstan Colliery, the location for the research Project. Centennial is also providing site access and support to the Banpu Energy Australia team as it leads and manages the research Project; Federal Government via Australian Renewable Energy Agency (ARENA); and NSW State Government Emerging Energy Program (EEP)
  • What is the role of Centennial Coal Company Pty Limited (Centennial)?
    Centennial owns the Newstan Colliery, the location for the research Project. Centennial is providing site access and support to the Banpu Energy Australia team as it leads and manages the research Project.
  • Where will the water come from? Are you using water from Lake Macquarie?
    The research involves using small volumes of mine water from Newstan Colliery. Newstan Colliery is an old mine, with expansive underground workings (voids) in multiple seams. These voids are typically flooded with water, and this water is managed by the mine on a daily basis. The research project will utilise some of this water to test how coal seams react to water movement, and to determine what types of infrastructure and technology may be needed. There will be no impact on the quality of water that is discharged from Newstan Colliery.
  • What is the timing of the Project?
    The research is scheduled to commence in early 2021 with initial results expected by Q3 2022. If the results indicate that a larger (commercial) scale application could be achievable, then the Project will continue and focus on that. However, there is a long lead time to any larger scale project, and community engagement, environmental assessment and planning applications will be key early, and necessary aspects.
  • Why 600MW? Is that large?
    600 MW (megawatts) is a nominal number. There has been no design completed, as the concept is yet to be proven (initial focus of the Project). As UPHES itself is not a new concept, there are a range of existing projects that can be referenced and standardised to 600MW. Therefore, reliable details are available for high level cost estimates using 600MW as a reference case, and this was used in applying for government funding. The real sizing of a UPHES is a factor of the size of upper reservoir, elevation difference and lower reservoir capacity. The true sizing for UPHES will come in the next stage if the initial work shows promise.
  • What are the benefits of the Project?
    The full benefit of the Project will not be known until after the research is complete. However, if the research shows that underground coal mines can be successfully used as lower reservoirs for pumped hydro energy storage, this opens up significant potential for repurposing old coal mines. From an environmental perspective, using underground coal mines as a lower water storage will substantially reduce the environmental impact when compared to traditional on river/ 2x surface reservoir UPHES. With the use of UPHES as a battery for renewable energy, then low carbon, dispatchable and reliable electricity can be achieved. From an economic perspective, the construction costs are also essentially substantially reduced when compared to traditional on river/ 2x surface reservoir UPHES. Should the Project be feasible, it could be highly replicable across many underground coal mine voids that exist in NSW. This in turn could potentially create a “second life” for coal mines and an employment transition opportunity for coal mining towns.
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