I can give some insight into why. It's a result of the head drop for Kidston PH. Because there is not a significant difference in height between the upper and lower storages (218m), the size of the tunnels to extract more than 250MW from the upper storage would be very large, the turbines would need to be larger, and this would increase CAPEX considerably. A good example of this is the 500MW Wivenhoe PHES which at the time of building had the biggest turbines in the world (with the biggest flow rate) to achieve that output because of the small 50-80m head drop.
8 hours really is a sweet spot for storage, as you can arbitrage energy over more than a single day (whereas 2-4hr batteries are only able to arbitrage intraday).
Have a read here:
https://arena.gov.au/assets/2017/02/kidston-pumped-storage-hydro-project.pdf
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I can give some insight into why. It's a result of the head drop...
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