Turnbull unveils Snowy plan for pumped hydro, costing billions

In its latest move on energy policy, the Turnbull government has unveiled a plan to boost generation from the Snowy Hydro scheme by 50%.

The government says the expansion, which it has labelled the Snowy Mountains Scheme 2.0, would add 2,000 megawatts of renewable energy to the National Electricity Market. This would be enough to power 500,000 homes.

Claiming the upgrading would be an “electricity game-changer”, Prime Minister Malcolm Turnbull said that in one hour it would be able to produce 20 times the 100 megawatt-hours expected from the battery proposed this week by the South Australian government, but would deliver it constantly for almost a week.

Turnbull flew to the Snowy early Thursday to formally announce the plan. The commonwealth is a minority shareholder in the Snowy Hydro, with a 13% stake. New South Wales and Victoria have 58% and 29% stakes respectively.

The government, through the Australian Renewable Energy Agency (ARENA), would examine several sites that could support large-scale pumped hydroelectric energy storage in the area, Turnbull said.

Energy Minister Josh Frydenberg said the cost would run into “billions of dollars”. It is being suggested it would be around A$2 billion. Frydenberg avoided being tied down on when it would be completed.

He said three new tunnels were being looked at, stretching 27 kilometres for the pumped hydro-facility. It would not involve new dams, but connect existing reservoirs and recycle water.

The plan had the potential to ensure there would be the needed renewable energy supply for those on the east coast at times of peak demand, Frydenberg said.

Tony Wood, energy program director at the Grattan Institute, cautioned that the plan would involve technical and economic issues, including whether it could make money, and to what extent it could contribute to solving the short-term power crisis.

“This isn’t some sort of magic panacea,” Wood told the ABC. Some hard-headed thinking was needed on what it would do and how it would work.

Turnbull said: “The unprecedented expansion will help make renewables reliable, filling in holes caused by intermittent supply and generator outages.

"It will enable greater energy efficiency and help stabilise electricity supply into the future,” he said – adding that this would ultimately mean cheaper power prices.

He said successive governments at all levels had failed to put in place the needed storage to ensure reliable supply.

“We are making energy storage infrastructure a critical priority to ensure better integration of wind and solar into the energy market and more efficient use of conventional power.”

Turnbull said an “all-of-the-above” approach, including hydro, solar, coal and gas, was critical to future energy supplies.

Snowy Hydro already provided back-up energy to NSW and Victoria and could extend to South Australia when expanded, he said. The expansion would have no impact on the supply of irrigation water to NSW, South Australia and Queensland.

The feasibility study for the expansion is expected to be completed before the end of this year, with construction starting soon after, he said.