Outcomes of the feasibility study
Snowy Hydro is an integral part of the National Electricity Market (NEM). Our reliable, fast start capability means we underpin the security and reliability of the system. At times of peak demand, we keep the lights on.
The NEM is changing at a rapid rate and the time is now right for Snowy 2.0. This is what led to Snowy Hydro undertaking this feasibility study. As Australia decarbonises, Snowy 2.0 is required to support an orderly transition, prevent blackouts and put downward pressure on energy prices. Snowy 2.0 pairs new dispatchable energy generation with large-scale storage to provide secure and reliable energy to the NEM, which ultimately benefits consumers.
An independent economic analysis was commissioned for the feasibility study and conducted by leading experts Marsden Jacobs and Associates (MJA). MJA’s extensive modelling confirms Snowy 2.0’s scale, strategic location and longevity make it by far the cheapest and best option to decarbonise.
The first energy generation from Snowy 2.0 is expected in late 2024 and will underpin the reliability and stability of the NEM for generations to come. The need for large-scale storage will only increase and in the future Snowy Hydro could look to replicate Snowy 2.0 to create up to 8,000MW of pumped-hydro storage at this site.
The project will progress to final investment decision (FID) in late 2018.
The feasibility study demonstrates the key benefits of Snowy 2.0 which include:
- System security and reliability - Snowy 2.0’s dispatchable energy generation can respond within minutes to changing market needs.
- Lower energy prices - wholesale energy costs will be lower with Snowy 2.0 in the market than without.
- Scale and central location - power from Snowy 2.0 will reach all NEM users including the major load centres of Sydney and Melbourne directly and South Australia indirectly.
- Supporting renewables - Snowy 2.0 will enable a low emissions future at least cost by underpinning the stability of the NEM as more and more intermittent renewables enter the market to meet global targets.
The feasibility study also demonstrates that Snowy 2.0:
- Is technically feasible - that is, it can be physically built and we have a base case design, construction schedule and costing.
- Is financially feasible - it will generate returns that meet Snowy Hydro’s stringent investment hurdles.
- Can be funded internally by Snowy Hydro, and we are looking at a range of financing options.
- Will not have any impact on downstream water users and doesn’t change the water release obligations under Snowy Hydro’s water licence.
- Will go through well established and robust planning and environmental approval processes.
To download a short summary booklet on the feasibility study, click here.click here.