The potential for Tasmania's energy system to be expanded is one step closer with 14 'high potential' pumped hydro energy storage (PHES) sites identified across the state.
The sites, located in Tasmania's central highlands and on its north and west coasts, have a potential combined capacity of up to 4800MW.
Funding from the Australian Renewable Energy Agency (ARENA) totalling $300,000 was provided to Hydro Tasmania to identify potential sites for cost effective, reliable PHES.
Thirty potential sites were identified, with 14 sites across eight lakes now highlighted as 'high potential'.
Minister for the Environment and Energy, Josh Frydenberg, said early modelling shows, if developed, the construction of the PHES sites potentially would create up to $5 billion of investment and around 3000 jobs in regional Tasmania over 10 to 15 years.
"The initiative which includes a bundle of proposed projects, such as redeveloping existing hydroelectric power stations, would double Tasmania's existing storage capacity - and, along with the business case study for a second Tasmanian interconnector, would improve the affordability and reliability of the National Electricity Market," he said.
The next step for the 14 'high potential' PHES sites is a 12-month feasibility assessment, including surveying to the highest available accuracy, modelling of both the market and water resource and identifying environmental, cultural and social impacts.
PHES involves pumping water uphill to a storage reservoir and releasing it through a turbine to provide additional energy into the electricity grid when it is needed. It can be dispatched rapidly, meaning it is well-placed as backup for renewable energy and during times of peak demand.
In his review of the National Electricity Market, Chief Scientist Dr Alan Finkel noted that PHES is the most mature electrical energy storage system available, accounting for 97 per cent of energy storage worldwide.
"The Turnbull Government put energy storage on the agenda to deliver a more affordable and reliable energy system for Australians. Be it Snowy 2.0 in New South Wales and Victoria, large-scale batteries in Victoria and South Australia or pumped hydro in Tasmania, South Australia and Queensland, we are exploring, upgrading and expanding energy storage projects across the country," Frydenberg said.