The Australian Government has committed up to $1.38 billion in an equity investment for Snowy Hydro’s Snowy 2.0, giving the green light for work to go ahead on the early stages of the 2000MW expansion project.
In a statement the Government said it has approved Snowy 2.0 as part of its plan to support new renewable energy for Australia’s future energy mix to deliver affordable, reliable power. The historic deal will see a high-tech expansion of the iconic Snowy Mountains Scheme and will help make renewables reliable, reduce volatility and drive affordability in energy markets and provide other services critical to the security and stability of the NEM, it said.
Following Snowy Hydro Board’s final investment decision on 12 December 2018 where the project was approved, the Government has reviewed the project’s business case and is satisfied that the project stacks up and will benefit energy consumers and the Snowy Mountains region.
The Government will commit up to $1.38 billion, with the remainder of the project to be financed by Snowy Hydro Limited.
Snowy 2.0 will increase generation capacity by 2000 megawatts and provide 175 hours of energy storage. Importantly, this will also put downward pressure on wholesale electricity prices.
Snowy 2.0 will create up to 2,400 jobs in construction and support up to 5000 direct and indirect jobs across the Snowy Mountains region, providing opportunities for local businesses, improvements in local infrastructure and increased economic activity.
This decision builds on the Government’s investment in Snowy Hydro following the acquisition from the New South Wales and Victorian governments on 29 June 2018 and work to back electricity supplies in Tasmania and Victoria with a new $56 million investment in the Marinus Link to support Tasmania’s Battery of the Nation project.
“It’s an exciting time for our Company,” Snowy Hydro CEO Paul Broad said. “Snowy 2.0, like the original Snowy Scheme, is a nation building project that is vital to Australia’s economy and our energy transition.
“This significant expansion of the Snowy Scheme will provide the storage and on-demand generation needed to balance the growth of wind and solar power and the retirement of Australia’s ageing fleet of thermal power stations. In short, it will keep our energy system secure.
“Snowy 2.0 is not only a sound business investment for Snowy Hydro with over 8% return on investment. It also represents the most cost-effective way to ensure a reliable, clean power system for the future.”
Snowy 2.0 Exploratory Works will start immediately.