Snowy Hydro’s independent Board of Directors has approved the Snowy 2.0 feasibility study, paving the way to a “final investment decision in 2018” on whether to expand the project, according to Snowy Hydro Ltd.
At its current capacity of 3,756 MW, the Snowy Mountains Scheme is located in Kosciuszko National Park, in southeastern New South Wales, Australia. The scheme includes nine hydroelectric power projects that collect and store water, which would normally flow east to the coast, and diverts it through trans-mountain tunnels and power stations.
The water is then released into the Murray and Murrumbidgee rivers for irrigation.
In its announcement released Dec. 20 about 11 pm GMT, the company said the feasibility study “confirms that the Snowy 2.0 pumped hydro expansion project is both technically and financially feasible.”
The feasibility study outlines:
- A strong investment case for the project and funding strategies.
- A base case technical design, to be further refined as the project moves to final investment decision.
- The independent estimation of costs between $3.8 - $4.5 billion, which takes into account the need for extensive reinforcement of the project’s structures due to the challenging geological conditions that were uncovered during the geotechnical drilling program.
- If Snowy 2.0 is not built, the NEM would need a combination of batteries and gas peaking stations to meet future energy needs. This would cost at least twice as much as Snowy 2.0.
- A project schedule that will see the first power generated from Snowy 2.0 in late 2024, in time to meet market needs.
Snowy Hydro CEO Paul Broad, said, “Snowy Hydro already plays a critical role in keeping the lights on, but Snowy 2.0 would supercharge our existing capabilities by adding an additional 2,000 MW of dispatchable generation [sources of electricity that can be dispatched at the request of power grid operators or plant owners according to market needs] and 350,000 MWh of large-scale storage.”
Broad also said if commissioned, the project could increase the reliability of Australia’s national electricity market, become an energy storage solution combined with intermittent renewables and replace baseload generation when coal-fired power stations retire.