Snowy Hydro 2.0 to get funding boost

DIFFICULT geology could delay construction of Snowy Hydro 2.0, with Prime Minister Malcolm Turnbull announcing an extra $8 million for the feasibility study.

The Tumut 3 power station at the Snowy Hydro Scheme in Talbing. Picture: Lukas Coch/AAP

DIFFICULT geology could see construction of Snowy Hydro 2.0 take six years to build, with Prime Minister Malcolm Turnbull announcing an extra $8 million for the feasibility study.

Mr Turnbull confirmed today a new $8 million accelerated agreement between the Australian Renewable Energy Agency and Snowy Hydro had been reached to drive planning for the construction of the project.

Snowy Hydro chief executive officer Paul Broad said the project would involve building a proposed power station about 200 metre long, about the size of two football fields.

“From top to bottom it will be a kilometre underground, straight down. So the size of the engineering challenge is enormous,” he said.

When asked how long it would take to build Mr Broad said the feasibility study would give a better idea, but said “it’s six years”.

“It depends on the geology and we will firm it up in the next month or two,” he said.

Mr Broad confirmed the feasibility study would be done in December.

More money is required for the feasibility study because it has been “reformatted”, and the “small project” has turned into a far larger and more all-encompassing project that also requires a lot more drilling.

Mr Turnbull said Snowy Hydro 2.0 would make renewables reliable as it would act like a large battery.

“This is how you make renewables work,” he said in Cooma today.

In the meantime Mr Turnbull said the government was contributing to making electricity more affordable and reliable.

“We know there are at least a million households, probably a lot more, that are paying more for electricity than they need to because they are on the wrong plan,” he said.

“So we are taking action right now to ensure Australians right now are not paying more for their electricity than they need. We are also taking action on gas prices.”

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The Snowy Hydro upgrade is expected to cost at least $2 billion overall, although the price tag may be closer to $3 billion.

The government had previously only committed $500,000 towards the project for a feasibility study, which is far short of the full estimated cost of $29 million.

During a Senate estimates hearing in May, Snowy Hydro’s chief operating officer Roger Whitby said the upgrade would likely cost $1 billion more than initially expected, once the cost of upgrading transmission lines to get the power to major cities like Sydney and Melbourne was factored in.

Prime Minister Malcolm Turnbull and Upper Tumut Area Manager Kent Allen view a generator during his tour of the Snowy Hydro Tumut 2 power station during his visit to the Snowy Mountains region today. Photo: Alex Ellinghausen

Cooma-based Snowy Mountains Engineering Corporation Australia has been selected to do the feasibility study, which was due to be completed by the end of the year.

Once the study is done, and subject to environmental approvals and funding being available, Mr Turnbull said construction could begin next year.

When Mr Turnbull announced the project in March he estimated it could be completed in four years but it’s since emerged it could take up to six years because of “challenging” geology.

Snowy Hydro chief executive Paul Broad told Senate estimates a four-year time frame was possible only if “everything went your way”.

Work has already begun on technical and drilling work and 350 people have reportedly been employed to do preparatory work near Tumut in the Snowy Mountains. It’s expected the project will provide 5000 jobs across NSW once construction starts.

Once the project is completed, it will generate an extra 2000 megawatts of hydro power for the National Electricity Market, more than the Hazelwood coal-fired power station in Victoria did.

The expansion is expected to include building three new tunnels stretching across 27km as well as new power stations. This will enable a large-scale, pumped hydro-electric energy storage system to be installed.

This system will help to stabilise the electricity grid because it acts like a giant battery that can store enough power to last for about one week.

Pumped hydro involves pumping the water back up the mountain using excess electricity during off-peak hours when power is cheap. This water is stored until there is a shortage of electricity during peak times, when it will be released to generate power.

Snowy Hydro is largely owned by NSW, with the federal and Victorian governments minority shareholders.

Prime Minister Malcolm Turnbull visiting the Snowy Hydro Scheme in March. Picture: Sahlan Hayes, Official Photographer to Prime Minister Malcolm Turnbull/AFP