The nation-building project in the Snowy Mountains to create a $2bn pumped hydro scheme has won approval after an intensive feasibility study, giving Prime Minister Malcolm Turnbull a huge fillip before Christmas.
The study found the scheme was feasible, both technically and economically, with the scheme’s ability to power 500,000 homes as a back-up to renewable energy in other parts of the country.
If the scheme gets the final approval mid next year it will create more than 5000 jobs.
The feasibility study found that:
- The project is technically feasible - it can be built and Snowy Hydro has a base-case design and detailed construction schedule;
- The project is financially feasible as it meets Snowy Hydro’s investment hurdles;
- • Snowy Hydro can finance the project itself using retained earnings and borrowing;
- Snowy 2.0 will start operations from 2024 and will underpin the reliability and stability of the National Energy Market for decades.
The Turnbull Government welcomes Snowy Hydro’s release of a feasibility study into the expansion of the energy generation and storage scheme, a release from the PM’s office said.
“The feasibility study clearly demonstrates that Snowy 2.0 is a viable pumped hydro project that will future-proof the National Electricity Market (NEM), helping stabilise the system and deliver lower prices.
“The project involves linking two large dams - Tantangara at an elevation of 1233 metres and Talbingo at 552 metres. When energy is cheap, in the middle of the night for example, water is pumped to the higher reservoir, and then when energy is in high demand and prices rise, energy is generated by releasing water downhill.
“The project will act as a giant 2000MW battery in the centre of the NEM providing enough power for 500,000 homes and much needed backup for the increasing amount of wind and solar coming into the system.
“Given the size of the two connected reservoirs it has the potential for future expansion of generation capacity. Snowy 2.0 will make renewables reliable.”
The Government says Snowy 2.0 will also lessen the volatility in the wholesale price of electricity and reduce the current reliance on gas generation as the main form of backup for intermittent renewables.
The release said Snowy Hydro acknowledged “geological challenges” for the project but said “these can all be overcome as the 27 kms of tunnels and the underground powerhouse cavern are constructed”.