Two large-scale pumped hydro energy storage projects in New South Wales (NSW), collectively worth more than $7 billion, have been declared Critical State Significant Infrastructure (CSSI).
The projects, announced by the Minns Labor Government, are expected to play a key role in strengthening grid reliability and supporting peak electricity demand as NSW accelerates its transition away from coal-fired generation.
These projects include the $3.5 billion Western Sydney Pumped Hydro Project at Lake Burragorang, proposed by ZEN Energy, which has the potential to supply electricity to around 500,000 homes during peak demand. The second is the $3.6 billion Yarrabin (Phoenix) Pumped Hydro Project near Mudgee in Central West NSW, being developed by ACEN Australia, with capacity to power approximately 600,000 homes.
Both projects are located on WaterNSW land and remain in the early stages of planning. Despite their CSSI status, each proposal will still be subject to a comprehensive planning and environmental assessment process, including public exhibition and opportunities for community submissions.
The declaration reflects the growing importance of long-duration energy storage as NSW integrates higher levels of renewable generation into the electricity system. Pumped hydro is widely regarded as a critical enabler of grid stability, allowing excess renewable energy to be stored and dispatched during periods of high demand or low generation.
The NSW Government said it has approved more renewable energy projects in the past three years than in the previous twelve years combined. Since 2023, 44 renewable projects have received approval, representing enough capacity to power an estimated 5.2 million homes once operational.
More than 50 additional renewable generation, storage and transmission projects are currently under assessment, representing around 13.5 gigawatts of capacity. If approved, these projects could supply electricity to approximately six million homes.
A further 196 projects, including solar, wind, battery storage and pumped hydro projects are at various stages in the planning pipeline.
NSW Minister for Energy and the Environment Penny Sharpe said these projects are positioned to stabilise the grid, support energy reliability during peak demand periods and Australia’s broader energy transition.
“Long‑duration storage like pumped hydro is essential to building a modern energy system that works for households, businesses and industry across NSW,” Minister Sharpe said.
NSW Minister for Planning and Public Spaces Paul Scully pointed out that two pumped hydro projects could play a vital role in supporting our energy security together able to generate enough energy to power every home in Greater Perth during peak demand.
“These projects are part of a strong pipeline of renewable energy proposals that shows industry confidence in our planning system and our commitment to delivering the infrastructure NSW needs for a clean energy future,” Minister Scully said.
NSW Minister for Water Rose Jackson highlighted that water is central to everyday life and could be further harnessed through these projects to power more than one million homes.
“Importantly WaterNSW has already conducted a number of initial assessments to make sure these projects won’t impact water security or quality and we will continue to do analysis regularly, to help inform the planning and assessment processes,” Minister Jackson said.
To read the NSW Government media release, click here.