Snowy 2.0 feasibility study approved
Snowy Hydro’s independent Board of Directors has approved the Snowy 2.0 feasibility study, and for further work to be undertaken for the project to progress to a final investment decision in 2018.
The feasibility study released last week confirms that the Snowy 2.0 pumped hydro expansion project is both technically and financially feasible. The comprehensive study provides a base case design and a strong investment case that exceeds Snowy Hydro’s stringent investment hurdles, with significant input from leading experts in economics, engineering and geology.
This project involves a 2000 MW expansion of Snowy Hydro's Snowy Mountains scheme, which consists of nine hydro-electric power stations and sixteen large dams connected by 145km of tunnels and 80km of aqueducts located mainly in the Kosciuszko National Park, which is in the south-east of the Australian state of New South Wales.
The feasibility study included an independent cost estimation for the project of between AUD3.8-4.5 billion (US$2.95-3.5 billion). This takes into account the need for extensive reinforcement of the project’s structures due to the challenging geological conditions that were uncovered during the geotechnical drilling program.
The study concluded that if Snowy 2.0 is not built, the National Electricity Market (NEM) would need a combination of batteries and gas peaking stations to meet future energy needs. This would cost at least twice as much as Snowy 2.0. It also argued that Snowy 2.0’s scale and central location will provide secure and reliable energy generation as coal-fired generation retires, and the necessary large-scale storage (350,000 MWh) to prevent blackouts and lower future energy prices.
The project schedule proposed in the study sets out that the power be generated from Snowy 2.0 from late 2024.
Between now and the final investment decision, Snowy Hydro will undertake further work including additional geotechnical drilling, issuing project tenders, finalising funding for the project and working through well established and rigorous environmental and planning approval processes.
SMEC Australia, part of the Surbana Jurong Group, provided the lead study engineer. The Australian Renewable Energy Agency also contributed to the study.
