The Federal Government today approved the Snowy 2.0 project.
In a major boost to the region, the government will commit up to $1.38 billion in an equity investment for Snowy 2.0, with the remainder of the project to be financed by Snowy Hydro Limited.
The project is estimated to cost between $3.7bn and $4.5bn.
Snowy 2.0 is expected to create up to 2,400 jobs in construction and support up to 5,000 direct and indirect jobs across the region, providing opportunities for local businesses, improvements in local infrastructure and increased economic activity.
The government is the sole shareholder in Snowy Hydro, after buying out the Victorian and NSW governments last year.
Snowy 2.0 will increase generation capacity by 2,000 megawatts and provide 175 hours of energy storage – enough to power the equivalent of 500,000 homes during peak demand, according to the government, which says the project will also put downward pressure on wholesale electricity prices.
Planning for the Snowy 2.0 project is well advanced. The Government’s decision green lights the project to progress to the early works stage.
The government said the expansion will help make renewables reliable, reduce volatility and drive affordability in energy markets and provide other services critical to the security and stability of the NEM.
Snowy Hydro Board’s gave its tick to the project on December 12, after which the government reviewed the project’s business case.
The government says it’s satisfied that the project stacks up and will benefit energy consumers and the Snowy Mountains region.
“Snowy 2.0 will inject the energy supply and reliability our electricity market needs, helping cut costs to families and businesses and cut Australia’s emissions,” Prime Minister Scott Morrison said.
“Snowy 2.0 is shovel-ready which is why it’s one of the first cabs off the rank in our next tranche of energy projects to underwrite power generation so we can make electricity more affordable and reliable.”
Earlier this month, the project’s exploratory works phase received planning approval from the NSW Government.
The planning approval allows the company to construct a 3.1km tunnel and supporting infrastructure, to give the company a better understanding of the underground geological conditions at the proposed new power station.
Those initial works are scheduled to take sometime between 18 months and three years to conclude, and include:
• An exploratory tunnel to the site of the underground power station 3.1 kilometres in length, dome-shaped, 8m high by 8m wide, and constructed using the same drill and blast method employed when the Snowy Scheme was constructed. The exploratory tunnel is intended to ultimately form the main access tunnel to the underground power station during the operation of Snowy 2.0.
• Construction pad and portal to the exploratory tunnel and associated construction pad would be established with a footprint of between 10,000 and 16,000㎡. The construction pad contains equipment and structures including a ventilation system, diesel generator sets, air compressors, office huts, laydown area for equipment, materials and refuelling, a workshop, a temporary stockpile of excavated rock, water supply storage and dirty water storage for treatment.
• A construction compound would provide all supporting infrastructure for the Exploratory Works. The compound includes facilities like an accommodation camp, project office, workshops, concrete batching plant, fuel farm, laydown areas for equipment, water treatment plant, and sewage treatment plant.
• Site access to the work areas will be provided via both vehicle and barge. Vehicle access would be via Lobs Hole Ravine Road for the movement of personnel and light equipment, while bulky and heavy equipment would be transported via barge access on Talbingo Dam. Upgrades to roads and tracks in the area, including Lobs Hole Ravine Road, are required to facilitate access, including some road widening, gravel pavement overlay and installation of guideposts.
• Excavated rock management. It is estimated that approximately 500,000 to 750,000 tonne of rock will be excavated during Exploratory Works. The excavated rock is expected to be temporarily stored in designated areas at Lobs Hole. Final placement of the rock is yet to be decided.
Minister for Environment Angus Taylor said Snowy will play an integral role in powering the nation as the energy landscape experiences seismic change.
“Reliability and affordability are at the centre of Snowy 2.0,” Mr Taylor said.
“Snowy has unrivalled capacity to store power when it is not needed, and generate it when it is needed.”
The project will link two existing dams, Tantangara and Talbingo, through underground tunnels and an underground power station with pumping capabilities. Hydro-power will be generated by falling water spinning Snowy 2.0’s reversible turbines, which can also pump water in the opposite direction.
Snowy Hydro estimated the first power generated by Snowy 2.0 will be in 2024 and project completion was about seven years away.
Snowy Hydro CEO Paul Broad said the project is shovel-ready, with roadworks around Lobs Hole beginning in just four days.
“Today, after almost two years of rigorous engineering, financial and market modelling, we’re excited to embark on a new chapter,” Mr Broad said.
Snowy 2.0, along with the mighty Snowy Scheme, will underpin Australia’s renewable energy future for generations to come. With more intermittent generation coming online Snowy Hydro will play an increasingly critical role to keep the lights on.
“Snowy Hydro is the fourth-largest energy player in the NEM, we increase competition to help drive better outcomes for consumers.”