The iconic Snowy Hydro Scheme will get a $2billion expansion in what has been called a game-changer for east coast power supply.
It’s expected the new project — the first major expansion since the scheme was completed in 1974 — will increase its output by up to 50 per cent, or enough to power an extra 500000 homes.
Supercharging the Snowy scheme’s storage would help the electricity market cope with peak demand at a time when baseload energy is closing and intermittent renewables like wind and solar are not providing the reliable capacity Australian businesses and homes need, Snowy Hydro managing director Paul Broad said last week.
‘‘The creators of the scheme foresaw a time when its capabilities may need to be expanded and, as a result, there are very real options in-built in the scheme’s design to extract more value to the community,’’ Mr Broad said.
The Federal Government will give $500000 for a feasibility study to examine four possible sites for the expansion.
It could include three new tunnels stretching 27km and new power stations — but no new dams — and is expected to take from four to seven years to complete.
Prime Minister Malcolm Turnbull said the unprecedented expansion would help make renewables reliable.
Federal Energy Minister Josh Frydenberg confirmed the price tag would be in the billions of dollars.
‘‘The amount of new power we’re talking about here will be bigger than the Hazelwood power plant which is scheduled to close at the end of this month,’’ he said.
The Australian Renewable Energy Agency, which is paying for the feasibility study, said expanding the Snowy scheme would help to deliver its goal of ensuring a smooth transition to a renewable energy future.
‘‘Pumped hydro is economically viable right now and supports our grids by providing long-term energy storage capacity that’s available on demand,’’ chief executive Ivor Frischknecht said.
Labor gave cautious support to the project, which Opposition Leader Bill Shorten said was ‘‘interesting and worth exploring’’.
But he wanted more details about the cost, technical solutions and how long it would take.
The Climate Institute said while it was great to see more government investment in renewable energy, especially storage, Thursday’s announcement didn’t have enough details to answer important questions such as its environmental impacts in Kosciuszko National Park and how it would fare in drought years.
Clean Energy Council chief executive Kane Thornton said it was a smart move from the Federal Government and the Snowy plan should be considered as one of a range of short- and long-term options to fix energy problems.
‘‘Any way in which we can expand our hydro and use it more efficiently to meet our peak demand will reduce our reliance on gas and indeed allow us to use much more renewable technology like wind and solar,’’ Mr Thornton said.
But he said the half-decade time frame for the Snowy expansion meant it would run into the same challenges as many other investments in needing stable energy policies from the government.
SNOW HYDRO SCHEME 2.0
What is the Snowy Hydro Scheme?
■Hydro electricity generator using the Snowy, Eucumbene and Murrumbidgee rivers in the NSW Snowy Mountains.
■Largely located in Kosciuszko National Park.
■Construction started in 1949 and finished in 1974.
■Now has nine power stations with 33 turbines.
■Its 4100MW capacity provides about 32 per cent of all renewable energy to the east coast electricity grid.
■Jointly owned by the NSW (58 per cent), Victorian (29 per cent) and Commonwealth (13 per cent) governments.
What is the Snowy 2.0 expansion?
■Four sites being looked at in a feasibility study to be finished by end of 2017.
■Could build up to 27km of new tunnels.
■There would be a 2000MW boost to capacity — that’s enough to power 500000 homes.
■Could deliver power constantly for almost a week.
■It has a $1.5 to $2billion price tag.
■Likely to take up to seven years to build.
■First major expansion of the scheme since it was completed.
What is pumped hydro?
A pumped hydro scheme has two water reservoirs at different heights connected by a pipe.
When power prices rise or there is low supply from other sources like solar and wind, water is released from the upper reservoir and runs through a turbine into the lower one, generating electricity as it goes.
When power is cheaper, the water is pumped back up from the bottom to the top.
This has the added advantage of using excess power generation..
Where is it used now?
Snowy Hydro is one of three existing river-based schemes — the others are at Wivenhoe Dam in Queensland and Shoalhaven in NSW.
Studies are under way into a new scheme using seawater in South Australia’s Spencer Gulf and at an old mine site in Queensland.
Academics say there are thousands of potential sites along the mountains of the east coast.
How does it compare to other generation?
Pumped hydro offers all the benefits of other baseload power sources, such as coal and gas, but much quicker, more flexibly and without the emissions.
For example, a coal-fired power station can take up to 24 hours to reach full capacity, whereas pumped hydro can do it in one minute.
Plus, the technology already exists and it’s a fraction of the cost of battery storage.