Business
7 March, 2026
IDA support for hydro storage project in Wollondilly
A proposed hydro storage project in the Wollondilly Shire is one of 16 projects to be supported by the State Government’s new Investment Delivery Authority.
A proposed hydro storage project in the Wollondilly Shire is one of 16 projects to be supported by the State Government’s new Investment Delivery Authority.
The 16 projects have a combined investment potential of $34.4 billion and include 14 energy projects and two hotels.
Zen Energy – which has partnered with the SADA Group to form Burragorang Valley Green Energy – is proposing to turn degraded coal industry land at Nattai into a 1GW pumped hydro project.
The project will be almost entirely underground and will pump water from Lake Burragorang through tunnels to a reservoir on the former coal industry land.
When demand for electricity is high, water will be released from the reservoir to drive underground turbines and send renewable energy to the equivalent of 500,000 homes and businesses.
Consultation with key stakeholders has already commenced and ZEN says the project could be operational as soon as 2031.
The IDA’s endorsement is not the same as an approval.
All 16 projects will still need to go through full merit-based assessments and comply with relevant legislation and polices at both a State and Federal level.
The IDA-endorsed projects will now receive specialist government support from a dedicated concierge service, a planning assessment team within the Department of Planning, Housing and Infrastructure and from a multi-agency ‘Investment Taskforce’ based in the Premier’s Department.
The IDA’s focus will be on improving coordination across government – supporting clear engagement with proponents and identifying opportunities to resolve issues that may otherwise delay project delivery.
According to the NSW Government, feedback from the IDA’s first round of Expressions of Interest (EOIs) indicated major investment projects are often held back by system-wide issues – highlighting the need for a coordinated, whole-of-government approach to unlock investment while managing impacts on energy, the environment and local communities.
“The IDA is about making sure NSW is open for business and serious about unlocking major investment that supports productivity and long-term economic growth,” NSW Treasurer Daniel Mookhey said.
He said the 16 endorsed projects represented “significant private sector confidence in NSW and the critical role of investment in areas like energy security and the visitor economy”.
“By bringing agencies together and focusing on coordination, the IDA is helping ensure major investment proposals that matter to our economy receive the attention they require,” he said.
Other projects endorsed by the IDA included battery storage projects, gas projects and wind and solar farms.
WaterNSW has already granted ZEN access to Lake Burragorang – Sydney’s largest water storage – to conduct investigations to determine the viability of building a 1,000 megawatt (or 1GW) pumped hydro project.
“Subject to planning and environmental approvals, as well as community support, we believe construction could commence in 2027,” ZEN has said.
“Western Sydney Pumped Hydro could then be supplying 500,000 homes and businesses with on-demand renewable electricity by 2031.”
ZEN says the project would create 1500 jobs during the construction phase and 80 jobs in the long-term.
It would also involve the creation of an ‘industry-leading’ $1 million per year Community Benefits Scheme.
“ZEN will take on responsibility for the ongoing rehabilitation of the site, which was formerly a coal washery at Nattai and also ensure the water quality of nearby Lake Burragorang is safeguarded, serving as the necessary lower reservoir from which water will be pumped up through underground tunnels to an upper reservoir, situated on the old coal washery site,” it says.
“The project site is 24km away from Warragamba Dam and the treatment of Sydney’s drinking water.
“The operation of Western Sydney Pumped Hydro will produce no change to water levels in Lake Burragorang and will not cause any flooding of the shoreline or surrounding natural environment.”