Snowy 2.0 FAQs
What is the Snowy 2.0 project?
Snowy 2.0 is a major expansion of the existing Snowy Scheme, adding new pumped-hydro capability between Tantangara and Talbingo dams through an underground network of tunnels and a new underground power station. The project will increase the Scheme’s generation capacity by up to 2,000MW, and at full capacity, provide about 175 hours of energy storage - enough to power three million homes for more than a week.
Snowy 2.0 will act like a giant battery, pumping water to the upper dam at times of low demand and storing it to generate energy at times of high demand. This large-scale storage capability will be critical for the energy market as the economy decarbonises and more intermittent sources of electricity generation (like wind and solar) come online, while coal-fired power stations retire.
The on-demand generation of Snowy 2.0 (and the existing Snowy Hydro business) will 'firm up' new intermittent renewable generation, filling in the gaps of energy supply and underpinning the reliability and stability of the system. Read more about the Snowy 2.0 project here. To view an interactive map of the project, click here.
What were the outcomes of the 2017 Snowy 2.0 feasibility study?
The 2017 feasibility study demonstrated the key benefits of Snowy 2.0, including:
- System security and reliability - Snowy 2.0’s on-demand energy generation can respond within minutes to changing market needs.
- Lower energy prices - increasing the supply of energy and competition in the National Electricity Market will put downward pressure on energy prices.
- The central location - Snowy 2.0 will be located between the major load centres of Sydney and Melbourne and central to planned renewable energy zones.
- Low emissions - Snowy 2.0 enables a low emissions future to be delivered at least cost, by providing energy system stability that supports and ‘firms’ renewable generation.
The 2017 feasibility study also concludes that Snowy 2.0:
- Is technically feasible - that is, it can be physically built and there is a base case design, construction schedule and costing;
- Is financially feasible - it will generate returns that meet Snowy Hydro’s stringent investment hurdles;
- Could be funded internally by Snowy Hydro;
- Will not have any impact on downstream water users and doesn’t change the water release obligations under Snowy Hydro’s water licence; and
- Will go through well-established and robust planning and environmental approval processes.
The 2017 Feasibility Study cost estimate for the project was between $3.8-$4.5 billion and the study also estimated the first power to be generated by Snowy 2.0 would be in late 2024. Read the 2017 Snowy 2.0 Feasibility Study here.
What workforce and business opportunities will Snowy 2.0 generate?
The Snowy 2.0 workforce is expected to grow from a small base in year one, to an estimated 1,000 – 2,000 at peak times. There will also be a large number of jobs generated indirectly by the project, both regionally and beyond.
A workforce plan is being developed and Snowy Hydro is seeking specialist contractors (through a tender process) to carry out the civil engineering and mechanical and electrical aspects of the build.
A Snowy 2.0 Business Directory has been established for local businesses interested in the Snowy 2.0 project. To register your interest please complete the online form and see the business directory page for more information.
What are Snowy 2.0 Exploratory Works?
Snowy Hydro has been granted approval to proceed with a program of Exploratory Works to gain a greater understanding of the underground geological conditions at the proposed location of the new Snowy 2.0 power station.
The power station consists of multiple large caverns, about 800m below ground, which would house the machine and transformer halls. The proposed Exploratory Works include excavating an exploratory tunnel to the likely location of the cavern complex in order to investigate underground conditions in greater detail.
This information will be critical to the final design and site of the power station. The works also involve establishment of a construction compound and supporting infrastructure, upgrade and establishment of access roads and other activities.
What are the environmental impacts of the Snowy 2.0 project?
For almost 70 years Snowy Hydro has responsibly operated the Snowy Scheme in Kosciuszko National Park. We see the park as our backyard and are absolutely committed to minimising any potential impacts of Snowy 2.0, as we do for our existing business.
Snowy 2.0 is the subject of a rigorous EIS process which takes into full consideration the potential environmental, social and economic impacts of the project and provides measures to avoid, reduce and mitigate potential impacts.
Snowy 2.0 is expected to provide broad-scale environmental benefits through its long-term displacement of carbon-intensive energy generation. At a localised level, impacts from works will be avoided where possible and minimised and offset through positive management actions.
Following construction, land that has been disturbed will be rehabilitated to ensure a safe and stable environment and to meet our development approval requirements.
What will happen with the rock excavated for the Snowy 2.0 project?
Management of the rock and soil excavated by tunnelling is a key environmental consideration for the Snowy 2.0 project. As part of the EIS process we are investigating a number of disposal options including: reusing the rock as road base or in construction materials, and disposal on land or within the Scheme’s vast reservoirs. A combination of these options may be employed.
To help us determine the best excavated rock disposal option, we’re commissioning independent scientific studies that will conclusively answer the technical, geological and water-related aspects of each option.
The studies will determine local and downstream impacts during construction and operation, as well as how the rock would behave over the long term and under different conditions (including extreme flooding, droughts etc).
This scientific research will be rigorous, checked by independent authorities and documented in our EIS, which will be published online for community feedback as part of the environmental and planning approvals process.
Will Snowy 2.0 use or need more water?
The Snowy Scheme operates under a strict water licence issued by the NSW Government. Snowy 2.0 will not in any way impact on Snowy Hydro’s continued compliance with the water licence.
In particular, there will be no change to Snowy Hydro’s water release obligations from both the Murray and Tumut developments, and no change to environmental release obligations, meaning Snowy 2.0 will not have any impact on downstream water users or environmental flows.
Snowy 2.0 will also be less impacted by water inflows, so it will be less impacted by droughts. Snowy 2.0's pumping capabilities work in a 'closed' system - water is ‘recycled’ between the two storages so the same water can be used to generate power more than once. It will also provide Snowy Hydro with more options to manage inflows and water shortages over the long term.
Snowy Hydro will continue to operate Tantangara and Talbingo dams within existing Scheme operational and regulatory requirements, including the established operating target storage levels.
This means that the maximum and minimum operating levels of the two storages will not change due to Snowy 2.0. It is possible that the frequency of water level changes will increase as the water is cycled between Tantangara and Talbingo.
How does pumped-hydro work?
Pumped-hydro operates like a conventional hydro-electric scheme; in periods of high demand, electricity is generated by releasing water from an upper dam into a lower dam . However, instead of releasing the water after energy has been generated, a pumped-hydro scheme 'recycles' the water by pumping it back to the upper dam during times of low energy demand, so it can be used again.
How is Snowy 2.0 a ‘battery’?
The ability to pump and store water in huge quantities would see Snowy 2.0 act like a battery in the sense of absorbing, storing and dispatching energy.
Snowy 2.0 will pump water using electricity at times of low demand and store it in Tantangara Dam. Then, when energy is needed most, this stored water will be released into Talbingo Dam to generate electricity.
Pumping water at times of low demand means we are able to generate energy at other times, when consumers need it most. For example, if the wind is blowing in the middle of the night when consumers are asleep, wind energy can be used to pump water into storage. When households wake up and need electricity, we are able to generate energy on-demand.
What is dispatchable generation and why is this important to Snowy 2.0
Dispatchable (or on-demand) generators can control when they generate energy. This flexibility means electricity can be quickly provided to the grid on order, or according to market demands.
Snowy 2.0 will produce on-demand generation within minutes, for example at times of peak demand when extra energy is needed, or when intermittent generation like wind or solar power is not available because the wind isn’t blowing or the sun isn’t shining.
As more wind and solar enters the NEM we will see increased market volatility which impacts on energy prices. Intermittency also creates instability in the network which impacts the system’s stability and reliability.
The on-demand generation of Snowy 2.0 (and the existing Snowy Hydro business) will help to ‘firm’ up new intermittent renewable generation and underpin the stability of the system.
Intermittency also creates instability in the network which impacts the system’s reliability. The shared network that carries power around the NEM needs to operate at a constant and steady frequency - if the frequency drops too low due to very low generation, blackouts can occur.
The role for Snowy 2.0 and batteries
The future NEM will require a huge amount of storage (far more than just Snowy 2,0), which will be provided from a mix of projects and storage options.
Domestic and commercial batteries, small-scale and large-scale hydro projects and demand management will play a role. Batteries provide storage over short time intervals (several minutes up to an hour), while Snowy 2.0’s size and scale (350 gigawatt hours or 175 hours of operation) provides storage that can underpin the stability and reliability of the NEM.
An example of when vast amounts of storage would be needed include wind or solar droughts. In South Australia across the financial years of 2015 and 2016, there was a deficit between average wind production over a two-week period, and the minimum wind production over two weeks, of 60GWh. If a100MW battery was fully charged at 0.129GWh, it would be only be able to cover 0.2% (or a few hours) of this two-week energy deficit.
Snowy 2.0, however, could generate energy to fill the gaps throughout the two-week period without needing to recharge.
Do you use more energy to pump than you make when you generate?
Yes, there is a small efficiency loss when water is pumped. However, pumping water gives us the ability to absorb energy when it’s not needed, store the water, and release it to generate energy when required.
For example, solar generation is at its peak during the middle of the day, when many people are at work or school. Snowy 2.0 could use this solar energy to pump water so that when the sun sets and people get home, we can generate energy to meet the spike in demand that occurs in the early evening.
While some energy is lost pumping water, there is no other way to have it sitting in storage ready to be used when consumers need it most. It is not possible to make the wind blow or the sun shine, but with pumped-hydro we can generate energy on-demand.
Will we need a Snowy 3.0, 4.0 etc?
Yes. Over coming decades the NEM will need enormous amounts of energy storage.
From the early 2030s, we expect there will be the need and business case for further expansions of the Snowy Scheme (ie. Snowy 3.0 and 4.0) to keep up with the increase in renewables in the market and the growing requirement for large-scale storage and on-demand generation.
Snowy 2.0 could act as a model for further pumped-hydro expansion projects in the area in between Tantangara and Talbingo and further expansions could increase the Scheme’s capacity by up to 8,000MW.
Projects considered after the construction of Snowy 2.0 would be very cost-effective as they would utilise previously-built access routes and support infrastructure. In addition to Snowy 2.0 (and the future possibilities of 3.0, 4.0) we expect to see a mix of other new projects such as commercial and domestic batteries and demand management solutions to meet the needs of the NEM.
What about transmission of Snowy 2.0 power?
The existing transmission network was built many decades ago to get the energy from coal-fired plants to the market.
Our energy system is rapidly changing. In the future new transmission routes will be needed to connect new generation projects, renewable energy zones that are geographically dispersed and strategic storage projects right across the NEM.
The Australian Energy Market Operator (AEMO) is responsible for planning the national transmission network for the future. AEMO has released its inaugural Integrated System Plan (ISP) which provides the transmission system developments to meet future NEM requirements.
AEMO’s ISP supports strategic storage initiatives such as Snowy 2.0, which is required to firm up intermittent renewables in NSW and Victoria, and indirectly, South Australia. The proposed upgrades to the grid are to the shared transmission network that renewable energy generation and storage projects connect to as they come online.
There is a regulatory framework in place to fund the shared network upgrades. Snowy Hydro (as a generator) does not own or operate the shared network and for this reason, the cost associated with upgrading the shared transmission network cannot be included in the 2.0 project costs.
However, the cost of the lines that are required to connect Snowy 2.0 to the shared network will be funded by the project, as they are connection assets to be used solely by Snowy Hydro.
Who owns Snowy Hydro?
Snowy Hydro has been an entity incorporated under the Corporations Act (Cth) 2001 since 2002, and is a Corporations Law company governed by an independent Board of Directors. The Commonwealth Government is the sole shareholder of Snowy Hydro Ltd.
What are the next steps to progress Snowy 2.0?
Following the final investment decision of Snowy Hydro’s independent Board of Directors, the company is proceeding with Snowy 2.0, subject to Shareholder approval.
Planning and environmental approvals are required for construction of Snowy 2.0 to begin.
Snowy Hydro has been granted approval to carry out a program of Exploratory Works to gain a greater understanding of the underground geological conditions at the proposed location of the power station. An Environmental Impact Statement for Snowy 2.0 Main Works will be submitted to the NSW Department of Planning in the first half of 2019.