Electricity transmission from Snowy Hydro in danger of decade-long delay

Electricity from Snowy 2.0 could be wasted for up to a decade because critical pieces of its infrastructure may be built years after the project comes online.

The $3.3 billion extension cord that will transfer power generated by the new Snowy Hydro project to the NSW electricity grid is in danger of arriving years after the project comes online in 2025.

When it is completed in early 2025, Snowy 2.0 will deliver 2,000 megawatts of dispatchable power to Victoria and NSW via two giant interconnectors which have connectors that will allow its electricity to reach NSW and Victoria. The interconnector which will deliver power from Snowy 2.0 is scheduled to be built by 2031 at the earliest, six years after the Snowy is scheduled to come on line.

The Snowy Hydro 2.0 project is expected to deliver 2,000 megawatts of power - when its interconnectors are built. Picture: Supplied

The Hume Link which has been budgeted to $3.3 billion will send the project’s power to Sydney. But it can be finished no sooner than July 2026.

Senior insiders at the Australian Energy Market Operator, which controls the East Coast grid, said that unless the state or federal governments kick in up to $370 million to get the project going now it may not be built for several years after that.

But a spokesman for federal energy minister Angus Taylor said the Government had ­already made substantial commitments in excess of $500 million to support and accelerate all major priority transmission projects, including Humelink. “Humelink has recently passed a key regulatory milestone for early works, and we are working with Transgrid to ensure the efficient delivery of this project,” he said.

Prime Minister Scott Morrison poses for a photo while on a tour of the Snowy Hydro Lobs Hole site. Picture: Pool/Alex Ellinghausen

The spokesman said the AEMO needed to revisit its predictions in the light of the early closure of Eraring which was announced earlier this month.

In its draft critical infrastructure plan released late last year it warned an external investment would be required to make sure the project is completed as quickly as possible. Transmissions systems need to be approved by the Australian Energy Regulator before work can start building them because the cost of the infrastructure is passed onto consumers through their bills.

Under the rules that the AER operates under it will be difficult for it to approve Hume Link at the moment because its hands are tied as the benefits to consumers are not clear enough from the project.

Sources inside the NSW government and energy market operator have raised concerns about delays to the project. Picture: Pool/Alex Ellinghausen

Unless a decision is taken quickly electricity from Snowy 2.0 could be wasted for up to a decade. A government investment in the interconnectors will have the benefit of cutting power bills of consumers as they won’t have to pay the full cost of building it.

Senior NSW Government sources said there is frustration at the lack of urgency being demonstrated by Canberra. “Why spend a couple of billion on a gas fired power station we don’t need when you kick Snowy along for $320 million?” a source said. “Don’t you want to ensure that power is going somewhere as its available.” The Telegraph has spoken to source at the Australian Energy Market Operator (AEMO) who said they were concerned that the project is in danger of not being finished on time when Snowy 2.0 is ready.

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