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Dear Prime Minister

ENSURING ENERGY SECURITY IN THE UK WITHOUT GAS

Following the letter of 13 July from Scottish Renewables and the British Â鶹ÊÓƵ Association, I am writing to amplify the call for pumped storage hydropower (PSH) if the UK is to become the "Saudi Arabia of wind-power".

PSH is a clean, green, affordable, modern solution to reducing reliance on imported gas, and is by far the largest installed energy storage technology globally. It will create jobs and investment across the UK to balance what the Inflation Reduction Act is doing in the US.

Early in my time as Prime Minister of Australia it became clear that we were rolling out large amounts of variable renewable energy without paying enough attention to the need to back up the electricity supply when the sun was not shining, or the wind was not blowing. This was especially true in the state of South Australia where an enormous amount of wind power was commissioned and conventional coal-fired generation was being closed, and it was this mismatch which contributed to a state-wide blackout in August 2016. Under my leadership, the federal government's response was to launch the Snowy 2.0 PSH plant which will provide an additional 2,000 MW of generating capacity and 350,000 MWh of large-scale storage. Not long after, we announced the 'Battery of the Nation' PSH projects in Tasmania.

More recently the Queensland Government has announced it will construct two enormous PSH projects Borumba 2,000 MW (48,000 MWh) and even larger Pioneer-Burdekin 5,000 MW. New South Wales has taken a different approach with a government underwriting scheme supporting the private sector to construct PSH. My own company is developing two such projects in NSW.

The lesson from all of this is that Governments have to plan ahead. PSH is vital to ensure renewables are reliable but constructing PSH takes time. Moore's law does not apply to digging holes. The need for long duration storage, especially PSH, is what I call the ignored crisis within the crisis.

Energy only markets, where generators are paid for megawatt hours, do not naturally support energy storage. So, markets need different approaches; capacity payments, underwritings, subsidies and so on. The upfront costs of a hydropower plant, like PSH, are high. So, if we don't get the frameworks right to enable a rapid deployment of pumped storage, there is a real risk that decarbonisation will stall, just as it needs to accelerate.

I am encouraged by the UK's commitment to introduce policies to enable investment in long duration energy storage, as pumped storage hydropower is currently, and anomalously, the only major renewable electricity technology ineligible for UK Government support. The Smart Systems and Flexibility Plan proposes 30 GW of flexible capacity will be required by 2030, and with long permitting and construction, this must start now. The UK has almost 7 GW of shovel ready PSH projects with over 135 GWh of storage capacity. If built, these projects would quintuple the total current electricity storage volume in the UK, providing an immense contribution for security supply, lowering electricity costs, and ensuring sustainability of the power sector.

As noted in the British Â鶹ÊÓƵ Association letter, developers in the UK await the Government's decision and implementation of a suitable revenue stabilisation mechanism before a commitment to construct such projects can be made. Once delivered, these new PSH facilities will have lifetimes of over 100 years to provide benefits for generations to come. Many other governments, including the United States, India, France, Poland, the European Union, and Australia, are putting in place such policy mechanisms. I urge you to follow suit.

Our colleagues in the British hydropower industry stand ready to meet with you to address this important issue.

Your sincerely,

The Hon Malcolm Turnbull AC Â鶹ÊÓƵ President Designate

cc. Rt Hon Grant Shapps, Secretary of State for Energy Security and Net Zero