The team behind the Walcha Energy Project has begun the next phase of a feasibility study to create a pumped hydro energy storage (PHES) facility at Dungowan Dam.
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Business accelerator Energy Estate made the announcement last week as part of an update on the Walcha Energy Project - a wind, solar and pumped hydro energy storage project of up to 4GW in total, situated around the town of Walcha.
They say it is a region that benefits from complementary renewable energy resources, with night-time wind and day-time solar.
Late last year Energy Estate joined forces with Mirus Wind and pumped hydro specialist Arup to sign a Memorandum of Understanding (MoU) with Tamworth Regional Council to conduct a feasibility study to explore an energy storage facility they say is a 'fundamental game changer'.
The PHES project would be based around the 16.4 megalitre Dungowan Dam and could potentially store between 500MW-1GW of solar and wind power for between four-to-six hours.
Last week it was announced the consortium has now commenced work on the next phase of the feasibility study which will be completed by December and involves a trade-off analysis of upper and lower reservoir options.
"The proposed dam upgrade has a possibility not only to improve the water security but also to provide dispatchability and energy security for the renewable energy development in the region," said Rosie King head of engagement and culture for Energy Estate.
In an interview with RenewEconomy, last November MirusWind director Mark Waring said the Dungowan Dam PHES project would enhance both the energy and water supply security for the region.
"If the upper dam was made larger, it could make more use of the catchment area," he said.
"So we could actually (arrive at) much better outcomes where you'll get the water supply enhanced, together with the energy supply, while generating regional economic development and jobs."
The consortium has previously met with Kevin Anderson to discuss the project, and his response to the announcement last week was positive.
"It is all part of the vision we need for the future," Mr Anderson said.
"The future mapping that we need to keep working on."
Tamworth mayor Col Murray said Council understood that it needed to find smarter solutions to manage both supply and demand for resources such as energy and water across the region.
"The MOU that was signed in December 2018 concerned a feasibility study into a pumped hydro project involving Council's new, upgraded or existing Dungowan Dam as part of the larger Walcha Energy Project," he said.
" Entering into the MOU allows us to support the exploration of potential pumped hydro energy storage at Dungowan Dam."