- Output of Snowy to increase by 50% on project completion in 2022
- 2,000 MW of power output will power 500,000 homes
- Power will be channelled into National Energy Market
- Energy Prices not likely to be affected in short to medium term
Just days after the South Australian Government announced a $550 million battery and gas power plant project, the Prime Minister Malcolm Turnbull will today announce a $2 billion expansion of the Snowy Hydro Scheme to boost its output by 50%.
The project has been dubbed Snowy Mountains 2.0 and will seek to add 2,000 Megawatts output to the current 4,100 MW – equivalent to the total energy needs of 500,000 homes. The power will be channelled into the National Energy Market.
The Federal Government co-owns the engineering marvel with the New South Wales (58%) and Victoria (29%) governments and the Commonwealth (13%) and will likely seek funding from the regional administrations, given that its value will soar once the four-year expansion project comes to fruition. It is operated by Snowy Hydro Ltd.
Project will take 4 years to complete
The Australian Renewable Energy Agency is set to be commissioned to carry out a feasibility study in the immediate future and it is expected that work to extend the network of tunnels and dams will commence by the end of this year or early 2018.
The current plant – built by the Chifley Labor Government between 1949 and 1974, uses pumped hydro technology using water to drive turbines to generate power, which is then pumped back up into the hills to storage dams.
As things stand, it comprises 16 dams and a network of 145 kilometres of tunnels and 80 kilometres of pipes and was designed with future expansion in mind – but why it took 35 years to come up with the plan, is anyone’s guess.
A political statement
Mr Turnbull – who on Wednesday met with gas producers – was quoted: “The unprecedented expansion will help make renewables reliable, filling in holes caused by intermittent supply and generator outages.”
He said that the venture would not only enable greater energy efficiency and help stabilise electricity supply, but also create jobs in the process. He said that more power supply will ultimately translate into cheaper power prices – though that is not likely to happen in the short to medium term, given that supply is still short.
The news must also be taken for what it is, a political statement following the drubbing at the polls suffered by the Liberal Party in Western Australia. This was evidenced by the rhetoric Mr Turnbull used about SA’s Labor Government plans in saying that Snowy 2.0 would produce 20 times more power per hour than the battery project that was recently announced by Premier Jay Weatherill.
Finally, Federal Government Action
Notwithstanding the political sabre rattling, the news of the planned Snowy Hydro expansion is welcome. Finally, the Federal Government is acting on the huge energy crisis that Australia is facing. While the news should serve to help futures pricing, there is still a lot to be done in securing supply in the short term and driving down the outrageous spot prices that are prevalent across the whole energy market. It is understood that current power generation by Snowy will not be affected.
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