Snowy 2.0’s 350GWh pumped storage capacity will be essential to maintaining energy security in Australia’s post-coal electricity system, according to new modelling by Baringa Partners, which found that replacing the project with shorter-duration batteries could lead to electricity shortfalls and significantly higher wholesale power prices during extended renewable generation droughts.
The analysis found that the National Electricity Market (NEM) faces a significant reliability gap without deep storage technologies capable of delivering electricity over multiple days. The report concludes that shorter-duration batteries alone cannot provide the same level of system resilience during extended periods of low wind and solar generation.
Snowy 2.0, a pumped storage hydropower project under construction in New South Wales, will provide 2.2GW of dispatchable capacity and 350GWh of storage, equivalent to around 160 hours of generation. The Baringa report identifies deep storage as a necessary complement to wind, solar, batteries and gas generation in a high-renewables electricity system.
The report defines deep storage as storage capable of supplying electricity for more than 16 hours and argues it is essential for maintaining reliability and system security during prolonged periods of low renewable generation.
Baringa modelled a scenario in which Snowy 2.0 was removed from the future energy mix and replaced with an equivalent generation capacity of eight-hour batteries. The analysis found significant differences in system performance during low-wind conditions, particularly after coal-fired generation exits the market.
In a simulated 2041 low-wind week, when coal generation had retired from New South Wales and Victoria, Snowy 2.0 was able to generate continuously for more than 72 hours and help avoid electricity shortfalls. By contrast, the replacement battery fleet exhausted its stored energy after several days. The modelling found wholesale electricity prices reached the market cap of more than A$26,000/MWh in the battery-only scenario, while prices peaked at A$8,283/MWh when Snowy 2.0 was available. Average wholesale prices over the week were A$7,095/MWh higher without Snowy 2.0.
Snowy Hydro chief executive Dennis Barnes said the findings demonstrate the need for a mix of storage technologies in a post-coal electricity system.
“Short-term batteries are the sprint-runners, vital for daily balancing, but only Snowy 2.0 can run the marathon,” he said. “Batteries are the best value way of providing short-duration storage, but they cannot see the grid through the multi-day wind droughts that Australia has seen before and will inevitably see again.
“Without Snowy 2.0, grid resilience is heavily compromised, threatening continuous supply during prolonged lulls in wind and solar generation. Snowy 2.0 will provide 350GWh of storage, the equivalent of 26 million home batteries, and the scale required to ensure a reliable power supply for every Australian.”
Barnes said the project represented a long-term investment in national energy infrastructure. “Like the original Snowy Scheme, which still underpins energy reliability more than 50 years after its construction, the pumped hydro expansion will be a national asset powering Australia for generations,” he said.
The report notes that deep storage projects can only deliver their full value if supported by sufficient transmission infrastructure and coordinated development of renewable generation and network assets. It identifies transmission projects including VNI West as important to unlocking the benefits of Snowy 2.0 for consumers.
Snowy Hydro said the project continues to reach key construction milestones. Tunnel boring machine Lady Eileen Hudson recently completed the 6km tailrace tunnel linking Talbingo Reservoir with the underground power station complex. Excavation of the underground power station caverns is nearing completion ahead of the next phase of construction.
