Good site selection: The cornerstone of successful pumped hydro

Pumped hydro projects are generational investments. They must therefore be considered in the context of long-term government energy strategies and network transmission plans. It is not enough to identify technically feasible sites; we need sites that meaningfully contribute to grid resilience and to the delivery of national energy roadmaps. 

That alignment calls for collaborative decision-making. Governments, transmission network providers, developers, gentailers and consultants all have a role in identifying where pumped hydro can create the most value. When projects are developed as part of a wider strategic view, they can strengthen energy security and support the transition to renewable energy in line with broader national goals. 

In practice, this means: 

• Governments providing policy direction and frameworks that give clarity on system needs. 
• Transmission network utilities supporting integration with transmission expansion to build resilient systems. 
• Gentailers providing guidelines on how these assets can be integrated into portfolios to support a resilient power supply.  
• Consultants and technical teams applying rigorous assessment methods to confirm a site’s potential.  
• Investors backing the prospects that have the strongest fundamentals and a credible pathway. 

A growing concern in the current landscape is the number of sites being advanced without a sufficiently critical assessment of the fundamentals required for a PHES facility. Optimism bias can lead proponents to push forward with sites that require complex or novel engineering solutions to meet ambitious targets, rather than first assessing what the site’s conditions can realistically support.  

While enthusiasm for new projects is welcome, pursuing sites that are unlikely to succeed can overwhelm regulators, undermine investor confidence and erode industry credibility. 

A large volume of unsuitable sites can also place pressure on the contractors capable of delivering  complex projects. Time and effort spent assessing or preparing bids for sites that may never reach construction can be frustrating and tiring, tying up valuable industry capacity that could be directed towards higher-potential opportunities. 

A more disciplined approach can help. If early-stage support and incentives are directed towards projects with genuine potential – and sites without the necessary fundamentals are filtered out early – governments can reduce wasted effort and focus public and private investment where it will be most effective. 

Defining what makes a site “good” requires a clear framework. Six pillars stand out as central to a robust assessment: 

1. Topography 
   Natural elevation differences are a fundamental determinant of storage capacity and overall project economics in pumped hydro energy storage schemes. Greater elevation differences over short horizontal distances are generally preferred, but they can involve very steep terrain that creates constructability and access challenges.  
   Favourable topography strikes a balance: providing sufficient hydraulic head while supporting practical, safe and economical construction with a manageable environmental footprint. 


2. Geology 
   Geology is another critical pillar because the nature and condition of the rock mass directly impact the feasibility and cost of key structures such as dams, tunnels, and underground caverns. Favourable lithology and strong rock mass provide a solid foundation for civil works, while weak or heavily fractured rock increases excavation risk, support requirements and long-term stability concerns. Complex structural geology, such as extensive faulting, jointing, or adverse bedding orientation, can further complicate design and construction, particularly for tunnels and underground caverns. The presence of deleterious materials can introduce additional risks related to water quality, erosion, and durability. The best sites combine competent, stable geology with reduced adverse structure geology or materials, supporting safe and cost-effective construction. Where geological conditions are adverse, risks can multiply quickly.  


3. Environmental considerations 
   Sites that minimise ecological disruption, avoid sensitive habitats and manage water sustainably are more likely to progress more smoothly and earn stronger public acceptance. In practice, this includes avoiding areas of high terrestrial and aquatic biodiversity value, including threatened species habitats, wetlands and critical migration corridors. It also includes protecting water quality and managing reservoir operations in ways that reduce harm to downstream ecosystems, for example by altering temperature, sediment transport or flow regimes. Impacts on areas of high cultural and heritage value, including Aboriginal heritage, should also be avoided. Projects that integrate environmental and heritage considerations from the outset are more likely to secure approvals, reduce delays and support social license. 


4. Construction logistics  
   Construction and long-term maintenance depend on practical access for large equipment, materials and workers. Overly remote or logistically complex sites can become expensive due to long transport distances, road upgrades or new access roads, and a limited availability of specialised workforce that may require fly-in and fly-out arrangements.  
   
   Seasonal constraints, such as wet seasons, flooding or extreme weather, can restrict access and delay critical works, increasing schedule risk and costs. Reliable transport routes, power, water, and communications also influence schedule certainty.  
   
   Overall, sites closer to a capable workforce, established supply chains and existing infrastructure are more likely to reduce indirect costs, improve productivity and support a more cost-effective solution.  


5. Proximity and adequate network connection  
   Connection to the grid is fundamental for PHES projects, and proximity to existing or planned transmission lines can add significant strategic value. A strong connection point can support large power transfers and reduce the need for costly upgrades or reinforcement. Line congestion and limited network capacity can constrain dispatch and reduce project value. Longer transmission distances may introduce additional environmental constraints and land easement requirements, increasing approval risk and schedule uncertainty. Sites close to robust network infrastructure tend to be more cost-effective, easier to integrate and better positioned to support reliable grid support. 


6. Social benefits 
   Beyond technical factors, PHES projects deliver meaningful value to local communities, not only through jobs and economic activity, but also through improved regional infrastructure. When projects create clear, lasting benefits, such as local employment, skills development, community investment and enhanced infrastructure for remote regions, they can build stronger community support and social licence. Social acceptance is increasingly decisive in project success, and projects that contribute genuine value to local communities are more likely to progress smoothly over the long-term. 

Applying these pillars consistently can support the development of a credible project pipeline. This is critical not only for developers and investors, but also for governments and communities.

A disciplined pipeline can help:

• Governments target support where it delivers the greatest value for the region and the electricity system.
• Network services providers access the system support PHES projects could provide to operate resilient transmission networks.
• Developers and investors back projects with greater confidence.
• Communities see tangible outcomes from projects that are both feasible and beneficial.
• This approach moves the sector away from speculative proposals and towards a focused set of opportunities with a stronger chance of success. 

The discussion at the Forum on Pumped Hydro Energy Storage (PHES) highlighted a simple but powerful truth: good site selection is the foundation of pumped hydro. It is one of the most important factors shaping whether a project will proceed smoothly, deliver value and have long-term viability.

In an era where storage is critical to enabling the energy transition, the focus should not be on advancing every possible site. It should be on choosing the right ones – site that combine strong technical fundamentals with environmental sustainability, accessibility, grid integration and genuine social benefit.