$1 million feasibility study announced for billion-dollar Oven Mountain Pumped Storage project near Armidale

New England MP Barnaby Joyce announced on Wednesday the proposed project east of Armidale will receive a $1 million subsidy for a feasibility study.

The study will by funded by the Australian Renewable Energy Agency, Mr Joyce said.

The Oven Mountain project would use two natural granite basins as a battery, pumping water uphill with surplus power and converting gravity into energy during an electricity shortage.

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With 600 megawatts of capacity and 6 hours' of generation, the scheme would compliment existing renewable power generators in the New England area, Mr Joyce said.

"We've made massive investments in the New England into renewable energy, in fact we're one of the biggest renewable energy hubs in Australia," he said.

"The pumped hydro actually gives that the capacity to shore up the energy supply."

The hydroelectric storage scheme was first assessed by engineers over two decades ago.

Mr Joyce said it was a good idea and its time had come.

"They talked about the inland rail for about 20 years too before we actually got in there got the money so we could build it," he said.

"Yes, they talked about this for 20 years but now we're setting towards actually doing it."

ARENA, which is Australia's largest renewable funding agency, is set to run out of money for new investment sometime this year without new government capital investment.

Mr Joyce was asked if the agency would receive reinvestment in the Commonwealth budget.

"The budget now is in totally different circumstances than what it was six months ago," he said.

"We're about to spend hundreds of billions of dollars on a stimulus package and associated issues pertinent to that.

"And that means that it'd be foolish to start talking about what may or may not be in the budget."

The Oven Mountain project won a grant for half-a-million dollars from the state government for a feasibility study last year.

It's just the latest in new renewable energy development in the region.

The town of Manilla will build itself its own renewable power plant, plus a solar-hydrogen battery.

Uralla will soon be home to a 720 megawatt 2.4 million panels solar farm, plus storage as part of the New England Solar Farm.

A $300 million second round of Glen Innes' White Rock wind farm was approved last year.

The enormous Walcha energy project is set to install 4 gigawatts of solar, wind and hydro-electric generation around Dungowan dam.