It was one of ex-Prime Minister’s Malcolm Turnbull’s biggest infrastructure projects and now it looks like coming to fruition after the Snowy Hydro board agreed to proceed with the massive Snowy 2.0 pumped hydro scheme.
The Board agreed to proceed with the project based on due diligence, and the final tick from the major shareholder, the Federal Government awaits.
But Federal Energy Minister Angus Taylor did not jump straight into saying the Federal Government would give the final green light.
“This is a significant decision by the Snowy Hydro Board,” Mr Taylor said.
“The Government will consider this project on its merits – I’m not going to preempt that process. As we’ve always said, the Snowy 2.0 needs to stack up.
“We will take whatever time is required to do the necessary due diligence and go through our usual processes to ensure we make the right decision.”
The scheme is expected to cost between $3.8 and $4.5bn and Snowy Hydro says it can fund the project itself.
The independent Board of Snowy Hydro Limited approved a final investment decision to proceed with Snowy 2.0, subject to shareholder approval this morning (Thursday morning).
Snowy 2.0 will provide 2000 megawatts (MW) of on-demand generation and 350,000MW hours of large-scale energy storage.
“After almost two years of rigorous due diligence on every aspect of the Project, including detailed financial analysis and ongoing geotechnical drilling, the Board is confident Snowy 2.0 is a strong investment for the Company,” Snowy Hydro said.
“The Board has informed the Shareholder of its decision to proceed with Snowy 2.0 subject to Shareholder approval. Further Project information will be released following Shareholder approval.”
The feasibility study found if the scheme will create more than 5000 jobs.
The feasibility study found that:
• The project is technically feasible - it can be built and Snowy Hydro has a base-case design and detailed construction schedule;
• The project is financially feasible as it meets Snowy Hydro’s investment hurdles;
• Snowy Hydro can finance the project itself using retained earnings and borrowing;
• Snowy 2.0 will start operations from 2024 and will underpin the reliability and stability of the National Energy Market for decades.
Already works have started on building a camp for workers, sourcing technical equipment such as a massive drilling bit from Germany, and lining up potential contractors to build the project
The project involves a 12m diameter tunnel running from Tantangara Dam down to a huge generating underground chamber. Up to 8 turbines could be housed in the large vault, about 1km underground. The new 10-12m diameter tunnel will fall slowly from Tantangara when it will hit a massive 700m straight drop down to the turbines. A surge tank will be built above the pressure shaft. An access tunnel will also be built to the underground station from about 1km to the northern side of the drilling site at Gooandra. The water then flows down to Talbingo Reservoir. Water is pumped down during optimal generation times, and then water is then pumped back up when energy costs are low.