Fossil fuels aren’t the answer to the global energy crisis – but this might be

To accelerate the clean energy revolution, we need to invest in clean energy storage solutions like hydropower, writes Malcolm Turnbull, former prime minister of Australia

The ‘Hollow Mountain’ Cruachan power station in Scotland, which I visited during Cop26, was commissioned back in 1965 (Drax Group)

The extreme volatility in global gas markets means energy bills are becoming desperately unaffordable for households all around the world. Government-backed loans or rebates may be welcome in the short term, but are the policy equivalent of a sticking plaster. They fail to address fundamental problems with the energy system.

Some commentators would have you believe that the solution to the energy crisis lies in greater gas exploration. But this misses the point. We’re not going to bring energy bills down – or have a hope of tackling climate change – by becoming even more reliant on fossil fuels. The only way out of this crisis is by scaling up the green energy transition.

But while investment in wind and solar power has been actively incentivised, much less attention has been given to the need for clean energy storage to bridge the gap when other sources are overstretched or under-supplied.

That’s a real shame, because we have a ready-made energy storage solution right before us. Pumped-storage hydropower, or “pumped hydro”, involves pumping water from a lower reservoir to a higher reservoir when electricity is plentiful and prices are cheap. When demand increases and prices rise, the plant operator then runs the water downhill through a turbine to generate clean electricity for homes and industry.

Like conventional hydropower, pumped hydro is a type of utility-scale storage technology that rarely makes headlines, but it has been a mainstay of global energy infrastructure for decades, with over 90 per cent of worldwide electricity storage provided by these water batteries.

The UK has around 4 gigawatts (GW) of energy storage, of which about 3 GW comes from pumped hydro. Much of this storage was built decades ago: for example, the “Hollow Mountain” Cruachan power station in Scotland, which I visited during Cop26, was commissioned back in 1965.

Like other UK-based hydropower operators, Drax, the owner of Cruachan, has ambitions to expand. Across the UK, about 2.4 GW in new storage capacity has been given planning consent and around another 3.3 GW is awaiting consent. Even if this all gets built, the country’s storage capacity will still fall significantly short of the 13 GW of new storage required by 2030, according to the National Grid.

The energy industry believes even more long duration storage is needed to balance fast-growing variable renewable sources. A report published today in collaboration with SSE Renewables and other groups for example says the UK needs as much as 24 GW of long duration energy storage – eight times the current capacity.

This shortfall, replicated in many countries around the world, is due to the lack of national policy frameworks to incentivise grid-scale, long duration, clean energy storage. The way projects like Cruachan were built in the past – often through state-controlled utilities – gave way a long time ago to deregulated markets that no longer provide revenue certainty for investors.

This means it is very difficult to secure private sector involvement in new projects. It’s why no new pumped hydro plants have been built anywhere in the UK since 1984, despite their potentially huge impact on decarbonisation. In fact, outside China, there are few globally significant pumped hydro schemes anywhere currently under development.

One notable exception is the 2GW Snowy Hydro 2.0 pumped hydro scheme in Australia, which I commenced when I was prime minister. It is the largest of its kind in the southern hemisphere and is now under construction, due to be completed in 2025.

Many excuses are made as to why pumped hydro isn’t the answer to the energy crisis. Some ask why grid operators can’t turn to lithium batteries instead, ignoring that these batteries store energy only for a few hours – when we need much larger solutions to store energy for several days at a time.

Other critics raise concerns about the environmental costs of hydropower. The way in which hydropower is built today is very rigorous, with all new projects expected to conform to a global Hydropower Sustainability Standard developed and agreed between industry, governments and civil society groups.

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Other sceptics contend there aren’t enough sites on which to build new hydropower projects. Recent advances in science and technology, however, mean that new reservoirs can be built without damming or impacting existing river systems. Cruachan is a typical example of a pumped hydro system, with an upper reservoir situated high above Loch Awe. Other sites can be found unconnected to existing water bodies, even in abandoned coal mines – of which the UK has many. A global atlas developed by the Australian National University has identified more than 600,000 potential locations for pumped hydro worldwide, including numerous new sites in the UK.

Given hydropower’s importance to future energy grids, it’s therefore vital that technological innovation is met by innovation in policy and finance mechanisms. Sustainable investment criteria developed by the UK government, European Union and other jurisdictions should reward rather than penalise these renewable projects that support climate mitigation and water management.

Easing the path for new investments in clean storage solutions will make net zero emissions targets meaningful. It will ensure countries don’t fall back on fossil fuels to safeguard energy supplies.

This is the ignored crisis within the climate crisis. We can no longer overlook the need for clean energy storage to support the roll-out of wind and solar power.

As the public starts to feel the pain of rising energy prices, now is the time for policymakers everywhere to make the argument for the power of water, alongside wind and solar. The decarbonisation targets we set for 2030 are fast approaching, requiring decisions today, not tomorrow.

Malcolm Turnbull served as prime minister of Australia from 2015 to 2018, and co-chair of the International Forum on Pumped Storage Hydropower from 2020 to 2021