NSW government approves first pumped hydro project since Snowy 2.0

Pumped hydro and solar project approved for Gloucester, NSW Wed 15 Jul 2026 at 2:11pm In short: NSW Planning Minister Paul Scully has approved a renewable energy project on the site of a former coal mine. The $1.8 billion project has the potential to power 120,000 homes. What's next? Mine site owner Yancoal is assessing the project's commercial viability, ownership and funding models. A pumped hydro project with the potential to power up to 120,000 homes has been given the green light in the Upper Hunter. The $1.8 billion Stratford pumped hydro and solar project will occupy the site of a coal mining operation that ended in 2024 in the Gloucester Valley. Gloucester Coal, a Yancoal subsidiary, has proposed a 300-megawatt pumped hydro station with 12 hours of energy storage and a 320-megawatt solar farm. New South Wales Planning Minister Paul Scully announced the project's approval today, saying it was the first pumped hydro project approved in the state since Snowy 2.0. "In addition to having the potential to power 120,000 homes, [it] is forecast to deliver around 13 per cent of the state's 2034 long-duration storage target," he said. "Long duration and storage is an important part of making sure that we have capacity in our system as demand fluctuates throughout the day." Planning documents show the surplus energy generated at the site during the day would be released during peak electricity usage at night. Water would be transferred via a tunnel between an upper reservoir, to be built in bushland, and an existing dam to generate power. For a community still reeling from the loss of jobs when the mine closed in 2024, the prospect of 350 construction jobs and 10 ongoing positions is significant. But planning approval is no guarantee the project will proceed, as its viability is still in doubt. In a statement from Yancoal, a spokesperson said the company "will now progress with assessing the commercial viability of the project". "Yancoal is considering preferred ownership, funding and operating models, subject to board approval," they said. During this process, the company would focus on, "advancing mine closure activities at both Stratford and Duralie in line with government regulations and community expectations." The proximity of a mountain range to the mine site and existing infrastructure makes it "an ideal location" for a pumped hydro project, the Yanco statement said. Australian National University hydro engineering professor Andrew Blakers said pumped hydro projects of the scale of the Gloucester proposal were important in the nation's energy mix. "What we need is a mix of big systems like Snowy 2.0 or pumped hydro in the Yallourn coal pit and small systems in the 3-to-30 gigawatt-hour range such as this one," he said. "We need a whole range of sizes and that diversity makes things better." Dr Blakers said without pumped hydro and wind farms the energy grid would not be able to replace coal-fired power during peak evening demand. "The thing about pumped hydro is it uses a very small amount of land, much smaller than an equivalent solar farm [or] wind farm transmission, and even smaller than a battery," he said. "One big advantage of a coal pit is that you halve the amount of land that you need to flood and turning it into a pumped hydro makes a virtue out of a rather poor asset." Upper Hunter Nationals MP Dave Layzell said should mining sites be converted for productive purposes such as power generation and that planning should start before mines were decommissioned. "There's a bit of a time lag from the mine shutting to the new project starting and that's a challenge for local communities," he said. "We're certainly feeling the effects in Gloucester from the shutting of the mine, as businesses are really hurting there. "Pumped hydro storage of energy is a massive challenge in our future transition [and] this is a really good project."