Snowy Hydro announces that its shareholders have approved the 2-GW Snowy 2.0 pumped storage project, after consideration of the board’s Final Investment Decision. Snowy 2.0 is a pumped-storage hydro expansion of the existing Snowy Scheme.
“It’s an exciting time for our Company,” Snowy Hydro Chief Executive Officer Paul Broad said. “Snowy 2.0, like the original Snowy Scheme, is a nation building project that is vital to Australia’s economy and our energy transition. This significant expansion of the Snowy Scheme will provide the storage and on-demand generation needed to balance the growth of wind and solar power and the retirement of Australia’s ageing fleet of thermal power stations. In short, it will keep our energy system secure.
“Snowy 2.0 is not only a sound business investment for Snowy Hydro with over 8% return on investment. It also represents the most cost-effective way to ensure a reliable, clean power system for the future. When it is completed, Snowy 2.0 will be able to deliver 2000 MW of on-demand generation, up to 175 hours of storage, and deliver more competition that will keep downward pressure on prices.
According to a press release, last year, Snowy Hydro contracted 888 MW of wind and solar projects, which gave insights into energy pricing. This process confirmed many of the assumptions of Snowy 2.0’s business case, including that the National Electricity Market (NEM) has passed a tipping point. New renewables are now the most economic form of new generation, even when firmed by hydro or gas.
Snowy Hydro existing fast-start assets, and increased capacity with Snowy 2.0, will firm up large amounts of intermittent renewables by coming in and out of the system to “fill the gaps” by generating energy at times of peak demand, the company said.
Snowy 2.0 Exploratory Works will start immediately. The project is expected to generate up to 5,000 jobs over its life.