What began as a daring dream to provide electricity to every Tasmanian home and business has gone on to shape the state’s future. Hydro Tasmania has grown to become Australia’s largest generator of clean energy and outgoing CEO Steve Davy wears this badge proudly.
And now the vision has become bigger and bolder, with the state government set to meet its target of producing 100% of the island’s energy needs from renewables by 2022, and announcing a new target for Tasmania to double its renewable energy generation by 2040.
Founded in 1914, the Hydro-Electric Department was the vision of a dedicated community who took on the challenge of creating the Great Lake power scheme. Constructed in an unforgiving environment, Waddamana Power Station was a remarkable feat. Its first electricity was generated in 1916.
A century later, the hydro-electric sector has become not only the cornerstone of the Tasmanian economy but also its future. Hydro Tasmania is a part of the landscape and lifeblood of the state.
In fact, most locals have a personal connection with ‘the Hydro’, as it’s affectionately known. If they or their family or friends didn’t work at the Hydro at some stage, then their ancestors came to Tasmania to help build it. There’s a parochial sense of ownership associated with it as a result.
"What we do in Tasmania is for Tasmania. That’s just how we feel about things here," Steve says. "At our core, we’re about making Tasmania a better place." Hydro Tasmania is a government business enterprise, owned by the state government on behalf of the people of Tasmania.
The organisation operates 30 hydropower stations, a gas-fired power station, 54 major dams, and has interests in several windfarms. With the completion of the Basslink electricity interconnector in 2006, Tasmania has become a key player in the National Electricity Market (NEM), producing 9,000 gigawatt hours of clean electricity every year.
Momentum Energy is the company’s mainland electricity and gas retailer, providing quality sustainable products and services at competitive rates across the country. Entura is its engineering consulting business, which operates internationally.
The company employs more than 1,300 people, with 900 in Tasmania. All are passionate about Australia’s clean energy future.
Steve has a background in investment banking and trading and, after more than a decade in financial markets, he started to become interested in energy markets. "I was looking for meaning; I wanted something more than just a lucrative career," he reflects.
"Around that time, Australia had just signed the Kyoto Protocol, which meant emissions trading was going to take off. The energy market was where Australia’s carbon abatement challenge was going to be and I wanted to be part of the energy industry as it decarbonised.
As the pre-eminent renewable player in the Australian market, Hydro Tasmania appealed to me. I believed in the work it was doing." Steve joined Hydro Tasmania in 2005 and became CEO in 2013.
During his tenure, he has been instrumental in leading the company’s shift to becoming an integrated energy business.
So why hydropower? Currently more than 70% of Australia’s power comes from coal-fired power stations, with these expected to close within the next few decades. Although wind and solar are growing in importance, their energy output is variable.
This means energy storage will be crucial in the future for ensuring power is available when needed. According to Steve, hydropower is the largest source of flexible and controllable renewable energy generation and storage in the NEM.
It can provide terawatt hours of long-duration energy storage – called ‘deep storage’. While Hydro Tasmania’s hydropower stations are currently the workhorses for baseload power in Tasmania, the large-scale storage capacity of its lakes and dams, and potential future pumped hydro development, can offer a buffer to the variability of solar and wind power sources.
Our long-term purpose is to look after the community, the environment and do the right thing sustainably.
The Battery of the Nation is a government-backed initiative for Tasmania to deliver even more clean energy to mainland Australia. The Battery of the Nation and the proposed new second interconnector, Marinus Link, create a pathway for the state to make a greater contribution to the NEM.
This is expected to generate billions of dollars of investment and thousands of jobs over 10 to 15 years, while also giving Tasmanians the lowest possible power prices. Steve says this initiative represents the most reliable and cost-efficient means for supporting Australia’s future energy needs.
"Three years ago, Hydro Tasmania, with the support of the Tasmanian Government and the Federal Government, kicked off a project to demonstrate that Tasmania could double its renewable contribution to Australia," he recalls.
"Supported by the Australian Renewable Energy Agency, we proved there was a huge potential to increase the amount of interconnection between Tasmania and the country."
The state-owned transmission company, TasNetworks, is now developing the Marinus Link project, which will create a 1,500-megawatt interconnector, compared with the existing 500-megawatt Basslink cable.
"When Marinus is operational, we’ll be able to export 2,000 megawatts. With a larger interconnector, more renewable energy can be developed in both Tasmania and Victoria," Steve explains. The importance of storage can’t be underestimated.
"Australia is going to need storage to back up and support wind farms and solar power," he continues. "Our focus is getting a pumped hydro project ready for the market. In Tasmania, we already have surplus hydro capacity to back up wind and solar, and this can immediately be unlocked with more interconnection.
"We’ve got the water and steep hills, so we can build pumped hydro energy storage schemes at a lower cost than in other parts of Australia. Currently Tasmania supplies 5% of the national market and with the Battery of the Nation initiative, we’ll supply 10%, so it’s only part of the answer to Australia’s energy transition."
Clean and green
With its spectacular landscapes, rugged highlands, rainforests and alpine wilderness, Tasmania’s natural beauty is worldrenowned. Hydro Tasmania is the largest water manager in Australia, and its land and waterways cover an estimated 120,000 hectares, 13,000 of which are in designated World Heritage area.
"We have a responsibility to look after the catchments of the lakes and waterways we operate in and we take this very seriously," Steve explains. "We have a passionate environmental team that looks after the species we’re coexisting with."
As an example, Hydro Tasmania recently installed an eel bypass at Trevallyn Power Station to help eels travel through the dam wall. This allows them to navigate the river and complete their migratory life cycle.
The organisation played a crucial role in initiating and developing the Hydropower Sustainability Assessment Protocol in the early 1990s, which is a standard now used globally. In addition, Hydro Tasmania has an aquatic program to identify and understand all the species in its waterways.
Water management plans are in place to ensure water levels are correct for the habitats and various breeding cycles. The company has six catchments that are reviewed over a five- to 10-year cycle to understand what is happening in each area.
"Tasmanians are very connected to the natural environment," Steve says. "We put these measures in place to ensure our facilities coexist with the ecosystem we operate in."
The Battery of the Nation project has committed that the Tasmanian Wilderness World Heritage Area will be excluded and protected from all pumped hydro projects.
"We’re going through the process of understanding the environmental and social impacts the pumped hydro projects we’re investigating might have," Steve explains. "This includes our stakeholders’ expectations about how we look after the environment."
Steve says that providing reliable clean energy to the Australian mainland through the Battery of the Nation is one of the country’s most important energy projects. "I think Australia is in transition," he says.
"The Federal Government has a technology road map to decarbonise the energy industry and, at the same time, most state governments are promoting renewable energy in their own jurisdictions. There’s a lot of activity in the right space and it’s exciting."
Creating a sustainable platform for future generations is as important to Hydro Tasmania as the immediate priority of maintaining the existing infrastructure.
"One of our major roles is not just to operate our system, but to make sure it’s available for the future," Steve says. "Our asset management plan must ensure Hydro Tasmania’s assets are available for generations to come."
Keeping the lights on
Maintaining a secure energy supply has been central to the company’s response to COVID-19 and this meant moving quickly to prioritise its workers’ safety. "The people in our power stations, workshops, monitoring our assets and their environment are all providing essential services.
We have to ensure they have everything they need to stay healthy and feel safe, because during this social and economic uncertainty Tasmanians need to be confident the lights will stay on.
"It’s tricky to maintain social distancing and disinfection protocols when you’re working in the field or on machinery in tight spaces, but with some careful planning and a little innovation, we’ve not only maintained our work schedule, but most importantly we’ve looked after our people."
Prior decisions to invest in robust IT infrastructure have also paid off, when Hydro Tasmania’s entire office staff, including call centres for Momentum Energy, suddenly found themselves working from home as the pandemic unfolded.
Not only did the company pivot its operation to ensure employees were safe and could work remotely, but it pledged support to the community through a series of community grant programs, offering thousands of dollars to not-for-profit and community organisations.
"What we do is for the benefit of Tasmania and our community grant program is an opportunity to share this company’s success," Steve says.
"Our grants have helped to run markets, build community halls, keep people warm and fed, and so much more. I’m very proud that we can make direct contributions to the community that make such a difference."
With the scale of infrastructure and assets operated by Hydro Tasmania, maintaining and protecting its asset program is an essential undertaking. "Our asset program is our biggest responsibility, so we spend as much on our assets as we spend on everything else combined," Steve explains.
"Hydro Tasmania has 30 hydropower stations and, in any year, we would have three to five of those partially or fully offline, with significant life-extending upgrades in progress to make it as good as new.
"We’re reliant on Tasmanian labour supply companies, engineering companies and civil companies, and where required, national and international expertise to undertake all these jobs that we do on our dams, power stations and roadways to keep them up to standard."
The people of Hydro Tasmania are proud of what they do and where they’re doing it. They have a passion for the environment, a passion for renewable energy or a passion for Tasmania, and sometimes all three.
"Hydro Tasmania employees know they’re doing something important for Tasmania," Steve suggests. "Our long-term purpose is to look after the community, the environment and to do the right thing sustainably.
"For me, as CEO, it’s about tapping into that passion and making sure we’re all aligned around what Tasmania needs us to do. It was already there in our employees, so my job was to help align what was already motivating our people.
"I’ve always believed that you have got to create an environment where people can make their best contribution. Culturally at Hydro Tasmania, we’re creating a respectful, harmonious and inclusive environment. We’re ensuring everyone knows they’ll be listened to and their ideas will go somewhere.
"It’s a contemporary workplace and we’re looking after our people. Safety is a priority – both for employees and for those using our lakes and waterways. But it goes deeper," Steve says. "We have a connection with Tasmania and I hope that Tasmanians know we’ve got their interests at heart."
Before the end of 2020, Steve will be stepping down as CEO and exploring new opportunities. Timing is everything and he feels he has brought the company successfully to this point. He says it’s time to hand the reins over to someone who can continue the journey.
"I’m thrilled Hydro Tasmania has played a role in developing this road map for the state and stimulating the conversation nationally about renewable energy and decarbonising the power sector," Steve reflects.
"The company has spent the past three years getting to this point. Whoever takes on the role will have the opportunity to see it through to the end.
"Decarbonising the energy industry is why I wanted to join this sector. I’m passionate about Tasmania, renewable energy and the energy sector and I hope to work in a field that continues contributing to Tasmania and the development of Australia’s energy markets.
"Hydro Tasmania has a bright vision for the future and for bettering the nation. We’re proud to be part of a positive story for Tasmania and for Australia."
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