Why we need Snowy 2.0 and large-scale energy storage
Snowy Hydro already has the capability to store huge amounts of energy - at times of peak demand we keep the lights on. But our current capacity in the Scheme won’t be enough in the future, which is why we’re planning for Snowy 2.0 to help meet market needs.
Snowy 2.0 will be critical to helping provide Australian businesses and households with reliable, stable and affordable energy in the future. With the falling costs of new renewables and thermal generation progressively retiring, the National Electricity Market (NEM) is transitioning to a lower-emissions future.
The competitive economics of renewables have been underlined recently by the record low prices Snowy Hydro secured for its 888 MW renewable energy tender, strengthening the financial case for Snowy 2.0. This new solar and wind generation will be ‘firmed’ by Snowy Hydro assets, with the contracts providing price certainty for Snowy 2.0 pumping costs.
At times of low energy demand, excess energy in the system can be used by Snowy 2.0 for pumping, so that stored water is available at times of peak demand. In a market with a higher penetration of renewables, quick-start, on-demand energy like hydro-power and large-scale energy storage is vital. Snowy 2.0 is the most cost-effective and reliable way to supply energy when the wind isn’t blowing and the sun isn’t shining.
Pumping, storing and generating on-demand using a large hydro power scheme like Snowy 2.0 is the most cost effective option when it comes to large-scale storage.
Snowy 2.0 (and the existing Snowy Hydro business) will ‘firm’ up new intermittent renewable generation, filling the gaps in energy supply and underpinning the stability and security of the system. Our modelling shows there will be a need for much more storage than just Snowy 2.0. The NEM will need a mix of storage options including household and commercial-scale batteries and other pumped-hydro projects. There will also be a role for demand management and behind-the-meter solutions.