Sydney, 29 July 2025 – Today, hydropower leaders gathered at the Australian Clean Energy Summit for the launch of Pumped Storage Hydropower: Powering Australia’s Energy Future, a new report welcomed by Malcolm Turnbull, President of the International Hydropower Association (IHA) and former Prime Minister of Australia.

The report highlights the urgent need for a co-ordinated national policy framework and hydropower roadmap to accelerate investment in pumped storage hydropower (PSH), a technology critical to Australia’s long-duration energy storage and net zero ambitions. The report was built on discussions from across the Australian hydropower sector which took place earlier this year and built on last year’s Guidance Note for Key Decision Makers to De-risk Pumped Storage Investments.

To support the global development of PSH, in July 2024 IHA released Enabling New Pumped Storage Hydropower: A Guidance Note for Key Decision Makers to De-risk Pumped Storage Investments. Developed in collaboration with a global working group of senior industry representatives, the guidance makes recommendations to addresses barriers to PSH investment. The report emphasises the importance of tailoring approaches to national contexts and ensuring coherent policy environments to reduce project risk.

In Australia, where PSH projects are advancing but few private investments have reached Final Investment Decision in February 2025, IHA and GHD co-hosted two high-level forums in Brisbane and Sydney under the banner Pumped Storage: Powering Australia’s Energy Future. The events brought together senior leaders from government and industry to identify solutions to unlock the potential of PSH. Since the events, IHA has worked with the Australian hydropower industry to synthesise the discussions into a new report.

The new report stresses the need for immediate policy coordination at the federal level to ensure PSH and hydropower assets are fully integrated into Australia’s energy transition strategy. Discussions drew heavily on IHA’s global guidance note, focusing on actionable steps to de-risk investment and streamline project development.

“There is a clear need in Australia for the introduction of a co-ordinated national hydropower policy framework and roadmap, to incentivise pumped storage and hydropower investments,” said Malcolm Turnbull. “Now is a critical time for Australia as energy security has deepened as a political issue. There is an urgent need to consider the amount of large-capacity, long-duration energy storage that will be required to support Australia’s grid in the future.”

Key Policy Recommendations

The events and subsequent industry consultations have produced the following six priority recommendations for enabling Australia’s pumped storage ambitions:

• Recognise pumped storage and conventional hydropower as strategic, multi-benefit assets that deserve coordinated support from both Federal and State Governments.
• Plan and invest in hydropower infrastructure to align with long-duration energy storage targets.
• Define long-duration energy storage explicitly as 8+ hours in all relevant policy frameworks.
• Streamline licensing and permitting to minimise delays and reduce investor risk.
• Design consistent and appropriate government support mechanisms to de-risk long-life energy storage assets.
• Reform electricity market design to provide price signals that value firming and balancing services.

IHA urges the Australian Government to consider these recommendations as part of a broader policy review, including through the work of the Expert Panel Review of the National Electricity Market (NEM) led by Dr Tim Nelson. Introducing specific long-duration storage targets supported by market reform and a bespoke hydropower policy framework will help ensure a fit-for-purpose enabling environment for PSH and hydropower across Australia.

As Australia moves to decarbonise its electricity grid, pumped storage hydropower offers a proven, scalable and long-lasting solution for energy security. Now is the time to ensure the policy environment matches the ambition.