Fire sparks Snowy Hydro call to link NSW, Victoria power

Snowy Hydro power chief scheme says bushfire risk spurs need for transmission lines connecting Victoria and NSW.

The sky turns red from smoke of the Snowy Valley bushfire on the outskirts of Cooma. Photo: AFP.

The head of the nation’s giant Snowy Hydro power scheme has warned rising bushfire risk along the east coast has spurred the need for critical electricity transmission lines to be built connecting Victoria and NSW, but through the west of the states in non-forested areas that are less prone to fires.

Snowy boss Paul Broad cautioned that the east coast electricity grid faced fresh strain in coming days as temperatures rise and fires still rage in parts of the Snowy Mountains.

Bushfires took down transmission lines connecting NSW and Victoria on Saturday while razing more than half of the homes at Snowy Hydro’s operational town of Cabramurra. The blazes again exposed a key weakness in the national energy market by separating the NSW and Victorian grids, sending power prices soaring.

Mr Broad’s comments came as energy transmission companies scrambled to repair burnt-out infrastructure, with forecasts that damaged power poles could reach into the thousands, putting further strain on low timber supplies.

Almost 10,000 households remained without electricity on NSW’s south coast and southeast following hits to the power network over the past month.

On Wednesday, the Australian Energy Market Operator downgraded warnings that transmission lines in the region were under immediate bushfire threat, but Mr Broad said conditions were likely to worsen as the weekend approached, threatening Snowy’s critical energy infrastructure.

“We do have a fire raging down on us, on the Murray side. Our Murray 1 and Murray 2 plants are under attack now, so we’re very concerned about this Friday and Saturday,” he told The Australian.

“It seems like the fires north and south are joining and we are surrounded. The town of Khancoban — which is one of the original Snowy towns and which we dominate still — is under serious threat.”

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Snowy Hydro is one of the nation’s single biggest power generators with capacity of 4100MW. It also plays a key role in “firming up” intermittent renewable generation to stabilise the system.

Mr Broad said Saturday’s wildfires, which drove a surge in NSW wholesale electricity costs to the maximum $14,700 a megawatt-hour for an extended period, had cost the company “millions”, as it had been unable to cover contracted demand from its hydroelectricity contracts while transmission lines were out of action, despite ramping up energy supply from its gas-fired Colongra power station in NSW.

Mr Broad said demand spiked in NSW as the transmission line outage limited AEMO’s ability to draw extra power from Victoria over the weekend.

But the spiking prices drew other energy providers into the market, protecting the grid and alleviating the risk of blackouts.

Mr Broad said the incident demonstrated the need for new transmission lines to be built in the west of both NSW and Victoria. “It’s fundamental to how this market should unfold for the next 20 years,” he said.

Leading into the summer, AEMO secured more than 1500MW of short and medium notice energy supply agreements across the national electricity network. Of this, more than 1000MW was available for Victoria and South Australia, and the remainder in NSW and Queensland, to cover risks associated with extreme heat and bushfires.

Mr Broad said it would take some months to count the cost of the damage to Snowy’s infrastructure, and particularly the damage at Cabramurra — which he said Snowy was committed to rebuilding — but the tally was likely to run into the tens of millions of dollars, and possibly more.

“We even lost the cottage where the Queen, who opened the first scheme, stayed. And the book she signed is gone. So there’s a bit of raw emotion up here,” he added.

But Mr Broad said the company had suffered less damage than initially believed at the site of early work on the Snowy 2.0 expansion project, Lobs Hole.