The Sugarloaf Hydro Power Plant is being constructed by Hydro Tasmania and is due for completion after 2010.

The plant will recover an estimated 40 per cent of the energy used to power the two pumping stations that move water from the Sugarloaf pipeline across steep terrain to Melbourne.

The Sugarloaf hydro electricity plant is part of a network of nine plants installed across Melbourne’s water supply system, with others located at Cardinia and Thomson Reservoirs as well as six mini hydro plants at other reservoirs in Melbourne.

The 9 plants will create up to 51,000 MWh of renewable energy per year, which is enough to offset more than 62,000 tonnes of carbon dioxide emissions.

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Melbourne Water’s General Manager of Asset Planning Paul Pretto said that the project was part of the organisation’s efforts to reduce its impact on the environment.

“Melbourne Water uses a vast amount of electricity to move water and sewage around the system and we feel that we have an implicit obligation to lower our greenhouse gas emissions and source our energy from renewable sources.”