Doubters rallying against Snowy 2.0

The federal government is expected to soon decide whether to proceed with the Snowy 2.0 pumped hydro scheme.

The most vocal opponent of the project remains Barnaby Joyce. Picture: AAP

The federal government is expected to soon decide whether to proceed with the multi-billion-dollar Snowy 2.0 pumped hydro scheme, as more Coalition backbenchers express doubt about the economic and political wisdom of proceeding with the project championed by Malcolm Turnbull.

There has been speculation the government would be tempted to allow the issue to lapse until after the election to avoid a potential flashpoint within caucus ­between supporters of renewable energy and those who favour a new coal-fired power station.

The government has dodged questions about when it will make a decision on Snowy 2.0, but sources told The Australian it will be decided by cabinet within weeks.

In December the board of Snowy Hydro, wholly owned by the federal government since then prime minister Mr Turnbull initiated a buyout of Victoria’s and NSW’s stakes, gave the go-ahead for Snowy 2.0. Snowy Hydro sets the cost at between $3.8 billion and $4.5bn and claims it can fund the project itself.

The NSW government last week granted planning approval for exploratory works on the project, which during off-peak ­periods would use electricity mostly from wind and solar plants to pump water from one reservoir in the Snowy Mountains to a higher one through a massive tunnel and reversible turbine system. It would generate electricity during periods of high demand by running the water downhill through the same turbines.

Snowy Hydro said last week it hoped to start work soon, subject to approval from the government that required a cabinet decision.

Coalition backbenchers are becoming increasingly emboldened in expressing doubts about Snowy 2.0, particularly since Snowy Hydro has said the building of any new coal-fired power station would undermine its business model.

Tony Abbott said the future of Snowy 2.0 “depends on the business case”.

“We need more base-load power. If we don’t, we will be a first-world country with a third-world electricity grid,” Mr Abbott said.

“They are building coal-fired power stations all over the world. I don’t see why we are prepared to see foreigners use our coal if we are not prepared to use it here.”

Liberal MP Craig Kelly, as chairman of the backbench committee on energy, also expressed doubts saying “we need to look at this with sceptical attention”.

The most vocal opponent of the project remains Barnaby Joyce, who yesterday said he had been told by energy industry ­experts that a number of coal-fired power stations could be built for the price of Snowy 2.0, which will also require massive spending on new transmission lines.

“From my own position, I have just become so sceptical of a massive project whose cost keeps blowing out, whose returns to the grid are actually negative, and whose timeframe to completion is a decade or so down the track,” Mr Joyce said.

Energy Minister Angus Taylor said the government would “take whatever time is required to do due diligence and go through our usual processes to ensure we make the right decision”.

“As we’ve always said, the project needs to stack up,” Mr Taylor said. “Pumped hydro projects such as Snowy 2.0 will play a unique and essential role in the future national electricity market.”

Snowy Hydro chief executive Paul Broad insisted the business case for the project was sound: “The economics for this thing have got better and better. I am confident we will get approval.”