Australia’s New Pumped Hydro Era Starts at Kidston

Australia’s New Pumped Hydro Era Starts at Kidston

Most countries talk about long‑duration energy storage. Australia just switched one on.

In November 2025, the 2GWh Kidston Pumped Hydro Project in Queensland officially entered the National Electricity Market (NEM) – the first new pumped hydro energy storage (PHES) plant in the country in almost 40 years. For a grid racing to replace coal with renewables, that’s not a symbolic milestone; it’s a structural shift.

This matters for anyone watching green technology, AI‑enabled energy systems and the business case for large‑scale storage. Kidston isn’t just another big asset; it shows how repurposed mining sites, smart market design and digital optimisation can work together to stabilise a renewables‑heavy grid.

In this post, I’ll break down what Kidston actually does, why long‑duration storage is suddenly back on the agenda, how it fits with the boom in batteries, and what this means for developers, investors and energy users planning their own clean energy strategy.

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What the Kidston pumped hydro plant actually delivers

Kidston adds 250MW of power and around 2GWh of storage to the Australian grid, using two converted mining pits from the former Kidston Gold Mine, 285km west of Townsville.

Here’s the simple version of how it works:

• When there’s too much cheap solar or wind in the system, Kidston runs as a load. It uses 250MW of power to pump water from the lower pit to the upper pit.
• When demand and prices spike, it runs as a generator, releasing water back down through turbines to produce up to 250MW.

AEMO now recognises four units in its Market Management System:

• KIDSPHG1 and KIDSPHG2 – generation units
• KIDSPHL1 and KIDSPHL2 – pumping units

That dual identity – both generator and load – is what turns pumped hydro into a flexible grid asset rather than just a big power station.

From a services point of view, Kidston can provide:

• Energy arbitrage – buy low, sell high across multiple hours
• Frequency control – rapid up/down response to keep system frequency stable
• Voltage support – helping manage reactive power on the network
• Capacity – firm energy during evening peaks and heatwaves

For a grid that’s retiring coal and adding variable renewables, that combination is gold.

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Why long‑duration storage is now non‑negotiable

The reality about high‑renewables grids is simple: short‑duration batteries aren’t enough on their own.

Lithium‑ion batteries excel at:

• 1–4 hour energy shifting
• Fast frequency response
• Contingency events and system restart

They struggle economically when you ask them to cover 8, 10 or 12 hours of low wind or evening demand – especially as cycling requirements mount.

Pumped hydro, compressed air and other long‑duration energy storage (LDES) technologies step into that gap. Kidston is a textbook example of why LDES is essential in Australia right now:

1. Coal exits are accelerating. Several large coal units in the NEM are scheduled to close this decade. As that happens, the system loses not just energy, but inertia, spinning reserve and firm capacity.
2. Solar is flooding the midday market. Midday prices routinely crash, with increasing periods of negative pricing in some regions. That’s perfect charging fuel for pumped hydro.
3. Evening peaks are getting sharper. As air‑conditioning loads rise through summer and rooftop solar drops away, the so‑called “duck curve” deepens. Multi‑hour storage is the only sane way to flatten that.

Kidston can store around 2,000MWh – roughly ten times the storage capacity of a typical 200MW / 200MWh utility battery. You wouldn’t use it for every fast, small correction on the grid; you’d use it for big, sustained imbalances that last all evening or all night.

From a green technology perspective, I’d put it like this: batteries balance the minutes, LDES balances the days. Both are required for a stable, decarbonised system.

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Turning a gold mine into a green technology asset

Here’s the thing about Kidston that doesn’t get enough attention: this is industrial recycling at grid scale.

Instead of building brand‑new reservoirs and carving up untouched land, Genex Power has:

• Used two existing mine pits as upper and lower reservoirs
• Minimized new civil works by designing around existing topography
• Turned a legacy gold mine into a renewable energy hub, not a stranded liability

That’s exactly the kind of thinking the green technology sector needs: repurpose heavy industrial sites instead of walking away from them.

Environmental and social benefits

Repurposing mining infrastructure brings several advantages:

• Lower environmental footprint than a greenfield dam
• Faster approvals in many cases, because the disturbance already exists
• Regional jobs transition, shifting local economies from extraction to clean energy

Kidston also plugs into a broader hybrid vision – pairing pumped hydro with local solar and potentially wind, managed through advanced control software and market optimisation tools (this is where AI typically comes in, optimising when to pump and when to generate).

In practice, that turns a remote mine into a smart, data‑driven energy node instead of a historical scar on the landscape.

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The commercial model: long‑term certainty for long‑life assets

Pumped hydro projects are capital‑intensive and long‑lived. They don’t get built on merchant price risk alone.

Kidston works because of a 30‑year Binding Energy Storage Services Agreement with EnergyAustralia, which has dispatch rights and an option to acquire the project. That structure matters for two reasons:

1. Revenue certainty for investors. Genex can finance a multi‑decade asset with clearer visibility on cash flows.
2. Portfolio value for the retailer. EnergyAustralia gets reliable, controllable long‑duration storage to back a growing renewable portfolio.

For developers, there’s a clear lesson: LDES needs long‑term offtake or capacity contracts. The market simply doesn’t price 40‑year optionality in a way that banks will accept.

Public finance as a catalyst

Kidston only reached financial close in 2022 thanks to support from ARENA and the Northern Australia Infrastructure Facility (NAIF). That’s exactly how public capital should work in green technology:

• Take early risk in first‑of‑kind or first‑in‑decades projects
• Prove the technical and commercial model
• Crowd in private capital for the next wave

If you’re planning your own storage or hybrid renewable project, study this structure. Long‑duration assets often sit at the intersection of:

• Government agencies hungry for decarbonisation outcomes
• Retailers needing firm capacity
• Investors looking for infrastructure‑style returns

When those three align, big things get built.

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Queensland’s messy year: what Kidston tells us about storage strategy

Queensland is having a contradictory storage year, and Kidston sits right in the middle of that story.

On one hand:

• The state has backed the 5.7GWh Borumba pumped hydro project with AU$48 million in funding.
• Other big schemes like the 9.6GWh “Big G” are still chasing approvals.

On the other hand:

• The government cancelled the proposed Pioneer‑Burdekin project, once billed as the world’s largest pumped hydro scheme, over cost and environmental concerns.
• The state’s roadmap has been re‑weighted toward short‑duration storage, targeting 4.3GW of battery‑style assets by 2030.

Here’s my read: this isn’t a rejection of pumped hydro, it’s an admission that not every valley needs a dam and not every LDES project pencils out.

A sensible storage strategy now looks like this:

• Short‑duration batteries (1–4 hours) near load centres and renewable hubs
• Selective pumped hydro or alternative LDES in geologically and socially suitable locations
• Smarter software and AI to orchestrate fleets of assets as a virtual portfolio

Kidston demonstrates what a good LDES project looks like: existing infrastructure, clear grid need, long‑term offtake. Pioneer‑Burdekin showed the other side: environmental pressure and cost blowouts can still kill mega‑projects.

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How batteries and pumped hydro actually work together

The Kidston milestone landed at the same time as steady growth in battery energy storage systems (BESS) across Australia, like Potentia Energy’s 20MW/40MWh Quorn Park battery in New South Wales.

Some people frame this as a technology contest. That’s the wrong lens.

Quorn Park’s 40MWh BESS, paired with a 98MW solar farm, will:

• Smooth solar output
• Support the local network
• Shift a few hours of energy into the evening

Kidston’s 2,000MWh pumped hydro plant will:

• Absorb huge chunks of excess renewable generation over many hours
• Cover prolonged peaks and low‑renewables events
• Provide deep system security and capacity

The grid needs both:

• BESS for local flexibility and fast response
• Pumped hydro for regional and system‑wide balancing across long periods

From a green technology and AI perspective, the interesting action is in the software layer:

• Forecasting renewables and demand
• Optimising charge/discharge schedules
• Bidding multiple assets into energy and ancillary services markets

We’re moving toward a world where pumped hydro stations, BESS, demand response and even EV fleets are orchestrated by AI‑enabled platforms acting like virtual power plants. Kidston is one more powerful “player” on that digital field.

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What this means for developers, businesses and policymakers

Australia’s 40‑year break in pumped hydro development is over. That carries clear signals for anyone involved in green technology.

For project developers

• Look hard at brownfield sites. Old mines, quarries and dams can become LDES assets with far better social licence than untouched valleys.
• Design for services, not just energy. Grid support (frequency, voltage, inertia) can be as valuable as arbitrage.
• Secure long‑term contracts early. Structure storage services agreements that align with retailer and grid needs.

For large energy users and businesses

• Expect more firmed renewables offerings as retailers use assets like Kidston to back corporate PPAs.
• Use this moment to audit your load profile – some processes can shift to match low‑cost renewable periods, cutting both cost and emissions.
• Consider participating in demand response or behind‑the‑meter storage that complements system‑level assets.

For policymakers and regulators

• Support a mix of storage durations, not a single “winner” technology.
• Use grants, concessional finance or contracts‑for‑difference to unlock first‑wave LDES projects that the private sector can then replicate.
• Streamline approvals for repurposed industrial sites, where environmental impact is genuinely lower.

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Where green technology goes next after Kidston

Kidston shows that long‑duration energy storage isn’t theoretical anymore – it’s registering in the market, signing 30‑year contracts and supporting real‑world grids.

As more solar and wind connect through 2026 and beyond, the winners will be the regions and businesses that treat storage as infrastructure, not an afterthought. That means combining pumped hydro, batteries, digital control, and smarter demand in a coordinated way.

If you’re planning your own role in the energy transition – as a developer, investor, policymaker or large energy user – ask one question:

How will your strategy plug into a grid where Kidston‑style long‑duration storage is the new normal, not the exception?