Plans for a $2 billion expansion to the Snowy Hydro Scheme are essential to combat “staggering” electricity prices, according to the project’s chief executive, Paul Broad.
Broad has said in an interview that the project is looking to the “market of the future” and will help “keep the lights on”for Australian consumers paying more for their power compared to a year ago.
The expansion was announced by Prime Minister Turnbull last month and will add tunnelling between two existing reservoirs.
When complete, it is expected to bring an additional 2,000 megawatts of fast-start capacity into operation.
“It is staggering to me where prices are at today, and I think consumers need to have a Snowy that can respond to the market price signals that are out there today and keep the lights on,” Broad told the AFR.
“Prices 12 months ago were $35 [a megawatt-hour]; today you look on the screen out there, they’re $140 – and we have the huge penetration of renewables.
“To understand why this proposal looks so attractive is to understand the market of the future, not the market of the past.”
The scheme has come under fire, however, around the additional energy needed to pump water uphill to the higher reservoir.
It is reported that, to counter this concern, Snowy Hydro will have to borrow surplus power elsewhere, including reserves from South Australian wind energy.
“People who run these agendas for whatever reason need to sit back and have a hard look at it,” Broad said.
“It is an enormous scheme and it will be used only at those crucial times.”