The Snowy Hydro scheme has been approved in a bid to force energy prices down and make power more reliable for Australian businesses and families.
On February 26, prime minister Scott Morrison visited Tumut in southern NSW to announce the approval, with early works on the project now beginning.
“Snowy 2.0 will inject the energy supply and reliability our electricity market needs, helping cut costs to families and businesses and cut Australia’s emissions,” said Morrison.
It will create up to 2400 jobs in construction and support up to 5000 direct and indirect jobs across the Snowy Mountains region.
Australian Industry Group (Ai Group) chief executive Innes Willox said the Snowy 2.0 project is a necessary and welcome step in the long term interests of energy users.
“The national electricity market faces high prices and risks to supply. Cheap renewables are growing fast and will increasingly dominate supply. But renewables need to be complemented by more dispatchable, flexible capacity, particularly as old coal plants wear out and retire.
“Most of our current flex comes from gas generation, that has become very expensive. Pumped hydro projects of the scale of Snowy 2.0 are clearly going to be needed to deliver that necessary dispatchable power. The Government’s responsible decision puts an essential building block in place for the future energy system.
“There are some complications to manage which will require careful juggling of impacts on competition and investment,” said Willox.
“There are many important aspects of Snowy 2.0 that have not yet been decided – including how the transmission lines to connect the project will be paid for. The cost and risk worn by energy users needs to be fair and reasonable. It may be that the costs will be minimised with greater development of other new generation assets along the way.
“Snowy 2.0 is a strong step towards policy catching up with energy users’ needs,” said Willox.
Taxpayers will pay $1.38 billion for the project, with Snowy Hydro funding the rest.
The plant will increase generation capacity by 2000 megawatts and provide 175 hours of energy storage.