Joyce in push for coal over Snowy 2.0

Barnaby Joyce has reopened the Coalition’s energy wars, saying the $4.5bn Snowy 2.0 project should be shelved in favour of coal.

Prime Minister Scott Morrison making a drought announcement with Barnaby Joyce at Royalla, outside Canberra, yesterday. Picture: Kym Smith.

Barnaby Joyce has reopened the Coalition’s energy wars on the new battlefield of the proposed $4.5 ­billion Snowy 2.0 pumped hydro project that he says should be shelved or scrapped in favour of new coal-fired power stations.

The former deputy prime minister’s intervention, which is understood to be privately supported by Tony Abbott, comes just two months before the government will face a final decision on whether to proceed with the scheme.

Snowy 2.0 had been the darling of Malcolm Turnbull, who liked the initiative so much that as prime minister his government bought the Victorian and NSW governments’ shares in Snowy Hydro for $6bn, making him effectively the shareholder in the scheme.

Mr Joyce’s pro-coal statement could renew fierce division in the Coalition over energy policy, with a significant number of Nationals and right-leaning Liberal backbenchers said to still be keen on coal over renewables, upon which­­­ Snowy 2.0, which is an ­energy storage scheme, would rely.

“I would prioritise coal-fired power stations,” Mr Joyce told The Australian on how he would prefer the money targeted for Snowy 2.0 to be spent.

He said the cost of Snowy 2.0 kept blowing out, ­initially because the geology was far more difficult than first thought, then when it was established that $2bn would be required to upgrade transmission systems, creating a total cost of $6.5bn.

“When you take the initial estimate of all these costs, one thing which is certain is that it is miles away from what the final contracted figure will be,” Mr Joyce said.

For that money it would be possible to build at least one new coal-fired electricity plant, he said, and possibly a more modest pumped hydro plant elsewhere using existing tunnels, transmission lines, and generation plant where far less new infrastructure would be required.

Snowy Hydro, which is due to consider a revised feasibility study, is keen for an early government decision.

“Snowy Hydro is on track for our board to make a final investment decision on Snowy 2.0 in ­December,” Snowy Hydro chief executive Paul Broad told The Australian.

“The board’s decision will then be put to the federal government as our shareholder.

“We hope to commence the ­exploratory works for the project as soon as possible, subject to ­environmental approval,” Mr Broad said.

When completed in late 2024, Snowy 2.0 will pump huge ­quantities of water from one ­existing Snowy Hydro reservoir up through reversible turbines in a new underground power station to another existing reservoir 700m higher, via 27km of new ­tunnels.

It would pump water uphill at off-peak times when electricity, particularly from wind and solar, was plentiful and cheap, and that water would serve as stored energy to generate electricity ­during times of peak demand and less supply by letting water flow back down through the same ­turbines.

Mr Joyce said pumped hydro schemes required about a quarter more electricity to pump water uphill than was generated when the same amount of water flowed downhill.

“It is a net energy user — it doesn’t create energy,” Mr Joyce said.

“You can’t increase supply by reducing supply, and this means you need base-load power.”

Energy Minister Angus Taylor, who with Finance Minister Mathias Cormann is the “shareholder minister” for Snowy Hydro, said Snowy 2.0 offered “a unique mix of firming and storage oppor­tunities for the national electricity market”.

“The commonwealth has ­always stated that the business case needs to stack up on its own merits,” Mr Taylor told The ­Australian.