Energy crisis: Turnbull’s plan for $2 billion Snowy Hydro expansion

UPDATE: As the Prime Minister boarded a helicopter to look at the Snowy Hydro Scheme in Talbingo today, a groundswell of opposition was already erupting.

The Snowy Mountains Hydro Scheme.

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QUESTIONS are looming over the funding of Prime Minister Malcolm Turnbull’s proposed $2 billion upgrade of the Snowy Mountains Hydro Scheme, as Victoria’s Energy Minister and South Australia’s Premier fire up over the announcement.

The Turnbull government says it is embarking on one of the biggest infrastructure projects in a generation in a bid to boost flagging power supplies.

Prime Minister, Malcolm Turnball during a tour of the Tumut No. 3 power station at the Snowy Hydro Scheme today. Picture: Andrew Taylor.

The NSW government doesn’t know how much money it will have to contribute towards the $2 billion upgrade of the Snowy Hydro scheme. But it expects the project will create more jobs.

NSW Energy Minister Don Harwin said the state, which owns 58 per cent of the scheme, would clear up its financial contribution when the feasibility study into the project is released.

But he lauded the plan, saying the Snowy Hydro’s impact on mitigating an energy crisis was shown during February’s heatwave.

“Energy security and placing downward pressure on prices are my top priorities and I look forward to seeing the full details of what is proposed, and to discussing it with the Commonwealth, Victoria, and ARENA.

“We welcome jobs and growth in our regions from new energy, and we have a huge pipeline of new projects ready to go.

“The generation flagged a potential doubling of capacity of the Snowy would be significant and, if viable, a potential game-changer for renewable energy.”

However, Victorian Energy Minister Lily D’Ambrosio criticised the Prime Minister’s announcement today saying the Victorian government has not been briefed on the expansion scheme at all.

“We woke to the news this morning,” Ms D’Ambrosio said. “This is another example of the Prime Minister making up policies on the run. He doesn’t think things through.”

Australia's Energy Minister Josh Frydenberg defends the Prime Minister’s $2 billion Snowy Hydro expansion plans. Picture: AAP Image/Lukas Coch

South Australian Premier Jay Weatherill hurled insults at Frydenberg, saying the Snowy Hydro expansion is white-knuckled panic over energy policy. Picture: AAP Image/David Mariuz

The announcement also led to a stoush between South Australian Premier Jay Weatherill and Federal Energy Minister Josh Frydenberg.

The South Australian Premier said the proposed expansion was “a $2 billion insult to his state” and labelled the announcement as evidence of “white-knuckled panic” from the Commonwealth over energy policy.

“It is a disgrace the way in which your government has treated our state. South Australia can’t wait for a Snowy Hydro expansion years down the track,” Mr Weatherill said.

The Turnbull government has yet to reveal details of the major upgrade to the Snowy Hydro scheme, which are expected to include three new tunnels and power stations, and a 50 per cent boost to power output.

The original scheme, a ­series of dams and power stations completed in 1974 at a cost of about $820 million, will have its electricity capacity increased by 50 per cent under plans announced by Mr Turnbull.

Water released from the Snowy Hydro dam at Lake Jindabyne plunges into the river at a rate of 12,000 Olympic swimming pools a day.

“The unprecedented expansion will help make ­renewables reliable, filling in holes caused by intermittent supply and generator outages,” Mr Turnbull said.

Victoria's Minister for Energy @LilyDAmbrosioMP says she heard news about the expansion of the Snowy Mountains Hydro Scheme on the radio

— RN Breakfast (@RNBreakfast) March 15, 2017

“Every Australian should be confident that they can turn the lights on when they need them. We will always put sensible, considered energy decisions ahead of reckless targets that cannot guarantee power supply to Australians.”

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The numbers.

The expansion was ­revealed just two days after South Australia announced it is building a $550 million gas-fired power station and storage battery to combat the threat of blackouts that have plagued the state in the last year.

Mr Turnbull yesterday ­described those plans as inadequate and “a very expensive game of catch-up” for Premier Jay Weatherill’s “failures”.

The Snowy Hydro plan also comes weeks after extreme temperatures in NSW put its electricity grid under intense strain and led to warnings of rolling blackouts across the state.

The system is set in some of Australia’s most rugged country. Picture: Snowy Hydro Limited

Norwegian workmen on the project in the early 1950s would have been used to icicles.

A worker in tunnel between Cooma and Tumut in 1954.

The expansion will add enough energy to the national grid to power an additional 500,000 homes, Mr Turnbull’s said. It will produce 20 times the 100Mw/h expected from the battery proposed by Mr Weatherill, and deliver it constantly for almost a week.

The government has tasked the Australian Renewable Energy Agency to conduct a feasibility study of several sites that could support large-scale, pumped hydro-electric energy storage, which would involve new tunnels and power stations.

That study is expected to be complete by the end of the year, with construction to then commence.

The Snowy Hydro scheme already provides power to NSW and Victoria, and the expanded project could also power South Australia.

It is not expected to have an impact on water supplies to irrigators. The scheme is operated by Snowy Hydro, which is largely owned by NSW, with the federal and Victorian governments minority shareholders.

South Australia’s plans have created concerns within the federal government that the state is taking “unilateral action” on energy.