Snowy insists 2.0 good for wind and solar, not so good for coal

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Credit: Tourism Snowy Mountains

Snowy Hydro has moved to dispel some of the principal concerns around its ambitious Snowy 2.0 pumped hydro project, arguing that it will likely accelerate the uptake of wind and solar, and will not underpin the future of coal – despite an independent experts report suggesting otherwise.

In a briefing in Sydney this week, senior executives from Snowy 2.0 played down the suggestion made in the independent report from Marsden Jacob that Snowy 2.0 would result in more coal being burned because the presence of the 2GW and 175 hours of pumped hydro storage project.

The Marsden Jacob report asserted that Snowy 2.0 would “improve the economics of coal-fired generation” and that as a result emissions will likely rise, and coal-fired power plants will be used more.

“That’s not what we want to see,” says Gordon Wymer, the company’s former CFO who has just shifted to a new role as Head of Commercial, that includes strategy and carriage of the Snowy 2.0 project.

Wymer says that while the Marsden Jacob report was very useful, some of its conclusions differs from Snowy Hydro’s own analysis – which the company has yet to release in detail.

But Wymer says Snowy Hydro has no interest in supporting coal generators and instead suggests Snowy 2.o would likely bring in an extra 400-800MW of large-scale wind and solar projects that would otherwise not be built – because of its need for cheap power to pump water uphill.

He says wind and solar provide the best opportunities to do that – such as in early morning (3am) for wind, and the midday hours for solar.

Snowy Hydro has begun discussions to write contracts to provide a “floor price” for wind and solar projects, giving them enough certainty to lock in finance and allowing them to reap any upside in the wholesale markets, as well as reducing Snowy’s dependence on coal contracts.

Snowy Hydro finds itself in an interesting position. It sees Snowy 2.0 as critical for its own future, and crucial for the inevitable energy transition to a grid dominated by wind and solar, storage and distributed generation.

It has seized the political moment and won the support of prime minister Malcolm Turnbull, for whom the Snowy 2.0 project could be his signature initiative, or even his legacy project, given his inability to advance credible policies elsewhere.

But political patronage – and now 100 per cent ownership – carries risks, because the $6 billion (and counting) project proposal also becomes a political tool as well as a government asset.

Sure enough, Snowy 2.0 has been used by Turnbull and Frydenberg to hit the Labor states like Victoria and South Australia on the head, and to be critical of their renewable energy targets and battery storage plans.

The federal government has made clear – through its own speeches and the assumptions of the proposed National Energy Guarantee – that it regards anything approaching a 50 per cent renewable energy target by 2030 as “reckless”.

This has raised suspicion about its motives with Snowy 2.0. When first announced, Turnbull spoke enthusiastically about the need for “dispatchable energy”, but the rhetoric has since been switched to “baseload” and it wants the Clean Energy Finance Corp to fund carbon capture and storage.

These atmospherics have been exacerbated by some of the conclusions from the Marsden Jacob report, particularly its reference to the support for coal plants, and the suggestion – encouraged by the Marsden Jacob and Coalition rhetoric – that this is about Snowy 2.0 vs battery storage.

Snowy Hydro has become alarmed about this increasing perception that Snowy 2.0 would principally result in more coal being burned to push water up hill – until such time as renewables became a majority supplier to the grid – and of crowding out competition.

Wymer insists that Snowy’s future does not rely on the same scenario as the other big three (coal-burning) gen-tailers- AGL, Origin, and EnergyAustralia – and its plans are likely to be opposed by them.

He says Snowy Hydro’s future relies on a rapid transition to renewables – “otherwise we (Snowy’s business model) is toast”.

He says of the coal generation plant owners: “It is not in their interest to support decarbonisation. It is not in their interest to support Snowy 2.0 … because too much wind and solar weakens the competitive position of a coal plant.”

The Snowy 2.0 project plays a key role in the company’s plans to match its supply with demand from its growing number of customers, currently at 1.1 million through Red Energy and Lumo.

At the moment it needs 7.4TWh but can only supply 4TWh of its own power now. And because of the grid’s dependence on coal, that ends up being its predominant source of power.

But it also means that Snowy is not a price setter at high prices. Indeed, it argues it is as much of a victim of high prices as other customers (although its financial results might suggest otherwise).

It says that apart from being a major price setter at around $300/MWh – to defend its share of the “caps” market, it is all but invisible at higher pricing levels.

By writing “floor” contracts with new wind and solar plants, Snow Hydro says it can guarantee low cost supply to pump water up hill, the wind and solar plants are protected from negative price events, but the baseload generators remain exposed.

“Coal plants can’t deal with the intermittency. If we foster more wind and solar that is a huge negative for coal.”

Part of the confusion may be because Snowy Hydro is yet to release its own detailed economic modelling – due to its insistence that it is “commercial in confidence.”

But Wymer does say that the value of the project lies not just in the value of storage or arbitrage – but is based 40 per cent on storage revenue, 40 per cent on capacity and balancing revenue, and 20 per cent on ancillary services.

Wymer also sought to dispel the view that Snowy Hydro saw its project as a case of pumped hydro versus batteries, a fear that emerged as the result of Snowy’s previous excursions in the media, as well as observations made by Marsden Jacob.

It would certainly means less storage would be needed than otherwise, but he said batteries were playing in a different market to large-scale storage like pumped hydro, and Snowy itself would be a major investor in batteries, particularly as the new 5-minute settlement rule is introduced.

“We are not anti-battery,” Wymer says, adding that batteries will play a key role in the grid, in local storage, micro-grids, and grid stability. “Our biggest risk is the National Electricity Market and its potential obsolescence.”

For this reason, he argues that wind and solar will – and must – lead to fare lower prices than any other energy mix.

“We also believe that if the NEM does not pass through competitive pricing to consumers, then they )the customers) will look after themselves. If the (numbers connected to the) NEM is in decline, that is a disaster scenario.”

We hope he is right. When Turnbull first announced the idea, early last year, we wrote this analysis:  Turnbull drives stake through heart of fossil fuel industry.

That assessment was based on his focus on terms such as “dispatchable generation”, a language that has largely disappeared from his lexicon as the Coalition tries to force AGL into keeping Liddell open for another 5 years and pushes the idea for new coal plant and even carbon capture and storage.

A grid based on new “base-load” coal generation would seem an anachronism, given the cost trajectories of wind, solar and energy storage. It would also make projects like Snowy 2.0 look like Trojan horses.

But Wymer makes a strong case to think that our first reaction could be the correct one, and the business case for Snowy 2.0 wouldn’t work otherwise. But there’s still work to do. The environmental issues have yet to be resolved, and the economic case is not yet proven. Time will tell.



  • Robert Westinghouse

    Talk of “floor price” worries me….as the price of solar falls why is the government talking of a floor price. A ceiling price is more what the people want…Oh I forgot Snowy is now owned by the LNP so up, up and away with prices.

    • Peter F

      No it is a floor price for the generator not the customer. A long term contract with floor price of $45-55 from a federal government owned Snowy would probably be enough for a developer to get finance for the project. Depending on how the contract is written, the developer will get the higher of the floor or market price. For the seven to eight years they will get the market price until either Snowy II comes on line or system reliability is such that Snowy II is abandoned. At current price levels the project would be just about paid for before prices drop to the floor price

      • Robert Westinghouse

        Thank you. But I still do not trust the government to lower power prices or retain the assets in Aussie hands….

        • mick

          i dont trust this govt period

  • RobertO

    Hi All,I do believe that Snowy 2 will reduce coal power by about 2 GW (less the total efficiency of the system) say about 1.6 GW. What worries me is that the Fed Gov owns and has the ability to control it which puts the fox in charge of the hen house. No Fed Gov should have this much control unless the whole system is Gov owned.

    • John Saint-Smith

      A threat that power is being captured by the Federal government! Sounds like a call to the 2nd Amendment (US Constitution)

  • Chris Fraser

    Ultimately Snowy Hydro storage accumulation is technology agnostic. In the early morning, all the coal generators will be bidding very cheap, trying to find a sponge that will soak them all up. It’s only the eventual dilapidation of coal plant that will get rid of them.

    • RobertO

      Hi Chris Fraser, it a mathematical equation of Wind + Solar + Hydro (or PH Percentage factor, or Battery percentage factor) = Coal Power (removed from system), It not an accurate one of one but something like say 1000 MW wind name plate (Capacity Factor say 400 MW) + 2000 MW solar (say CF 20% or 400 MW and PH of say 500 MW (at 75% efficient) will take 400 MW of coal off line. The good point is that these systems do not need to be next to each other, but best if in the same state. The variability of Wind + Solar at maximum production puts pressure on coal but will not cause Coal to resign, but PH (or Batteries) are the icing on the cake for Coal (but not for gas as the ability to ramp up from cold is at most a couple of hrs and some are in minutes). Coal can no longer compete as the RE put pressure on 24 hr a day.

      • Alastair Leith

        “The variability of Wind + Solar at maximum production puts pressure on coal but will not cause Coal to resign…”
        Well that was exactly what happened to Northern and Playford in SA at around 35-40% RE (mostly wind).

        Old coal plants can have much increased maintenance costs when they are asked to ramp fast and regularly, preferring to chug along at ~90% C.F. until planned outage for maintenance. And some plants, even newer ones like Bluewater at Kwinana are not designed to ramp effectively in response to demand changes. Sustainable Energy Now asserts that even less than 50% RE coal is in big trouble in WA, as risk profile increase so does cost, and so does political risk, therefore contingencies and unnecessary upgrades (from a holistic perspective) get spent on with taxpayer/consumers dollars. The Duck Curve could be hurting coal within 2023-25 SEN estimates.

        Here’s an animation of the historical SWIS demand curve (southwest WA grid centred in Perth and extending north to Geraldton, south to Albany, east to Kalgoorlie).

        • RobertO

          Hi Alastair Leith, yes they did lose out but SA also had 3160 MW Gas capacity (at that time) and the two interconnects,(I do not know the exact capacity but may be 400 MW or 600 MW most).
          Just Solar or just Wind are not the issue for Coal compared to the combo of Wind +Solar + PH in the NEM because of the interconnects we have. WA needs it storage ASAP as it can not import energy. The duck curve will happen (and WA will be worse off) but NEM as interconnects to soak up more RE and Gas will be our back up (and we may get more interconnects or upgrades to interconnects (acting like battery). NSW part of the NEM will lose Coal but not Gas as we add storage. Even our household batteries and car batteries will moderate the rate of change, but coal is in trouble. Finkel recommended 3 years notice to close power stations and the COALition need to issue the laws to control that.

          • Alastair Leith

            The SWIS has a massive overcapacity issue in coal and in gas. SEN has modelled 85% RE by 2030 at same cost or less than BAU with coal and gas and guess what? It requires almost no new gas build (thanks to existing capacity payments leading to overbuild) and the amount of gas actually burnt would decrease by 66%. Storage only required beyond 50% if that, and it will be coming big time when sub $100/KWh prices hit the retail market (sooner than many think I expect). Coal could all be closed by 2021 if the McGowan Government had enough gumption to tell Synergy to write off their assets (the older ones probably completely amortised down already) and open the generation market to a reverse auction for Wind and Solar.

            Finkels three year announcement thing is absurd, how will that actually work following catastrophic failure due to increase ramping regime? Oh, announcing we’re spending $500m to repower our exploded coal-fired station but we’ll be closing shop in three years when 25% of that has been spent and the work is 50% complete?!

            And did you know fossil generators can renege on the three year warning if they want to?

          • RobertO

            Hi Alastair Leith, I suspect you are correct in the speed of change. COALition want it after 2050 or later and no change to emissions until 2030 and little progress after that. I beleive it will be around 2020 -22 as solar ramps up. Wind will continue to grow and storage will grow (batteries and PH systems and some H2 projects starting to impacting ie H2 added to the Natural Gas networks, or Fuel Cells Trucks. See

          • RobertO

            Hi Alastair, Give Finkel some teeth, most Coal Power Stations are multiple systems that have historical records with AEMO. Hold 10% of their wholesale positive price back for 3 years, look at the records to decide if the failure was deliberate. Call it a Reliability Guarantee so something like that. Given that a Battery takes about 1 year to install, a Solar Farm about 2 years and a Wind Farm about 3 to 5, having something with teeth is better that nothing. If the Generator fail then they need to buy replacement power to cover the losses until they repair the unit. It about the three years notice for that machine.

          • Alastair Leith

            You do realise that storage has the potential (likelihood) to flatten out the duck curve don’t you?

          • RobertO

            Yes, “Even our household batteries and car batteries will moderate the rate of change , but coal is in trouble. NSW alond has 1 million households and if only 10% add batteries at 10 Kw that still 10 MW (and I think that way under what will happen long term). Australia is adding about 1 GW per year and this will increase unless AEMC can stop it, which will be changed if the COALition lose the next election. Labour will not be able to stop at 50% RE as their target, they will overshoot to 60-70% in 2021 2022.

          • vibrantage

            My math says,
            100,000 households * 10Kwh of storage = 1Gwh.
            But yes when households start to embrace battery storage as a financial/lifestyle option all those kwh start to up. Bye bye duck curves, FF power plants and the COALition. Hello existential self empowerment.

          • Ian

            Thankyou Robert and V , the power wall 2 is an archetypical storage unit. 13.5kWh, 5kW steady, 7kW peak. 100 000 of such storage units @ about $ 1000/kW = $1.35 billion of people’s own money : 1.35GWh, 0.5GW steady, 0.7GW peak. One can play around with the figures: The opportunity cost of the federal government buying Snowy 2 was $6 billion . A hypothetical but very generous subsidy of 1/2 the cost of home storage would have leveraged $12 billion of home storage capacity: 12GWh, and about 5GW of output enough storage for 1 million homes.

            We know from the home solar experience that the uptake of far fewer systems results in a free fall in prices. The money spent on the purchase of the Snowy scheme could have been spent on kick-starting behind-the-meter storage.

          • Goldie444

            “A copper wire mentality” that is a great line and who is the copper wire chief in charge now!

          • Alastair Leith

            Upgrade 1: An incremental upgrade to increase Heywood Interconnector transfer capacity from 460 MW to 650 MW in both directions, by installing a third 500/275 kV transformer at the 500 kV Heywood Terminal Station.
            Upgrade 2:
            A new 500 kV line from Heywood Terminal Station into the South Australian network at Krongart, providing up to 2,000 MW of additional capacity in both directions.
            This option cost ranged from $500 to $800 million. It included supporting transmission augmentation projects that would be required in South Australia to support the higher transfer capability.


          • RobertO

            HI Alastair, Haywood is currently at 600 MW and the costs were about $108 million estimated at the time, I beleive there is still some work to be done on the SA side to upgrade the interconnector to 650 MW. Upgrade 2 was not approved.

    • Michael Gunter

      I have 8 years of half hourly historical data from the Breamlea Wind Generator, the obsolete grid-connected 0.06MW wind turbine, a 1987 demo project of the former SECV. Located within 250m of Bass Strait it’s max power output, based on a was about 1400hrs EAST due to sea breeze effect. Land breeze at night very much weaker. Inland wind farms tend to be becalmed at 3am due to temperature inversion effects.

      Being immune from temperature inversions, offshore wind farms can credibly supply pumped hydro projects from a pretty good capacity factor at 3am most nights, given proximity, trransmission constraints, contracts, even GOVERNMENT BANS ON COAL PUMPING WATER UPHILL, etc.

      Failing those rigid parameters being set, #FollowTheMoney commercial imperatives will mean Snowy 2.0 buys cheap coal power at night.

      Snowy Hydro’s claims might have some credence if a 2GW offshore wind farm gets built, and enters a long-term exclusive deal with them, but it is just pie in the sky at present.

      • RobertO

        Hi Micheal Gunter, onshore WTG are different today compared to 1987. They are higher off the ground and they are larger in swept area so they are less likely to be effected by calming at ground level. Sapphire is 140 metre in high with the blade reaching 200 above ground level. Because wind is a fluid you can have 2 m/s at ground level but at 100 meter above it can be moving at 6 m/s and at 150 metre above ground 12 m/s (often the higher above ground level they are the more stable the wind flow).

      • daw

        pity you posters don’t proof read your article before you post it …’ based on a was about 1400hrs EAST’ …. What the heck is that supposed to mean?

  • Ken Dyer

    This mob Marsden Jacob must be geniuses. I searched their website on Google and found this…..”We bring expensive knowledge of electricity and gas markets …”
    They got that right!
    Their crystal ball must be very expensive given that Snowy 2.0 has not even got to feasibility stage yet.
    So if it goes ahead, and that is a big if, one must ask when?
    Why, because solar and wind are not going to slow down any time soon and are getting cheaper by the day. On the other hand the coal is getting more and more flaky as the generators get older and their owners hold them together with bubble gum and baling wire.
    As for the Federal COALition, well employing Marsden Jacob just goes to show you can’t get good help nowadays.

    • Alastair Leith

      Unbelievable PR!

  • Jon

    I strongly believe Snowy 2.0 wont pump using electricity generated by FF, it can only make money by pumping in cheap power conditions which is only going to come about when high renewable generation capability exist.
    That’s why they need to start building ASAP as their construction period is so much longer than renewables.
    They also need renewables to become more dominant in NSW & Vic to have a business.

    It is good to see them coming out as saying they are different than chemical batteries, they can’t do what chemical batteries coupled with inverters can do and chemical batteries can’t do what Pumped hydro can do in a financially viable way until prices shift a lot.

    • John Saint-Smith

      Renewables plus pumped hydro storage = despatchable power. So why would Turnbull be talking about ‘baseload’ which means always available from spinning turbines, driven inevitably by the cheapest form of baseload power, coal? If he can’t or won’t tell us what he really means, it proves he and his Lying Nasty Party can’t be trusted.

      • Jon

        By the time Snowy 2.0 is online things will be a little different.
        1. Liddell will be gone
        2. S.A. Will be self sufficient for power with some pumped Hydro, solar thermal and virtual power plants
        3. Silverton Wind farm and several wind farms around Inverell will be built.
        4. All the solar projects we currently know of and several we don’t yet know of will be built.
        5. There will have been at least 2 federal elections

        Snowy 2.0 isn’t a project to have finished now, it’s a project to start now.

        • Michael Gunter

          Cheaper, fast-build off-river pumped hydro seems more common sense to me, rather than piggybacking slow-build pumped storage, needing “26km-of-tunnels-thru-solid-rock”, onto an ageing admittedly iconic run-of-river hydro project. All pumped hydro should have a shotgun marriage to offshore wind to encourage the fastest possible #DeathSpiral for FFs, based on the imperative of averting runaway climate change. All this common-sense technically doable stuff seems totally out of reach** without strong leadership from #auspol having a bipartisan science-led zero-carbon-ASAP plan to zoom ahead with….

          ** anathema to the incumbents. Oh yeah, minor detail, political donors get pollies and captured regulators to do their bidding almost invariably.

          • Malcolm M

            Snowy 2 is a different “product” to the pumped hydro based on a turkey nest dam with only 6 hours storage. Because of its much greater storage Snowy 2 will be able to buy (pump) during prolonged periods of high wind or solar and low demand, such as early spring before the air conditioning load ramps up. It will also be able to sell (generate) over prolonged periods, such as the gloomy doldrums in May and June. Snowy 2 would have capacity from empty for 6 hours pumping per day for 30 days, or from full 6 hours generation per day for 30 days. For comparison a pumped hydro with 6 hours storage can do little more than smooth over the diurnal peaks and troughs.

          • Malcolm M

            Nevertheless I would still like to see several comparison projects, such as adding ~500 MW of pump to the Murray power station, to pump from Khancoban Pondage up to Geehi, which is in equilibrium with Lake Eucumbene. This would help stabilise the Vic market once more variable renewable gneration is added, beyond what can be stabilised by Basslink and the Tasmanian system.

            There are also transmission limitations that should be addressed, to allow the Vic market to be stabilised by existing stations such as Tumut 3. The Vic-NSW interconnection is frequently limited to about a quarter of the transmission line ratings. Before new inter-connectors are built, other investments are required to get more value from our current transmission infrastructure. For example, only half the capacity of the Murray-Tumut 3 transmission line is made available to the market, so that if it trips it doesn’t overload the adjacent Murray-Upper Tumut line. One proposed non-transmission investment that could make this capacity available to the market is a 500MW brake at Loy Yang, which would detect over-frequency and reduce power available to the remaining line.

          • Jon

            Snowy 2.0 will be 1/2 built by the time environmental impact studies are done for new build dams, let alone construction approvals and water licences being granted.

          • Mike Westerman

            Why do you assume there will be no EIS and no challenges to a major civil project within a national park? Or that some other projects are not on existing water leases or have state support and will be fast tracked? You don’t seem to comprehend the investigation and design effort in a tunnelling exercise as complex as S2, quite apart from the transmission system studies that have yet to be done.

          • Jon

            There will be an EIS, but the impact and therefore the study for deep tunneling isn’t much compared to new construction.
            If they aren’t going to have water licences where are they going to get the water from?
            Tunnelling is a pretty straightforward operation these days after geotechnical is done, which is well underway (geotechnical is also the biggest environmental impact in most of the tunnels).
            Can’t see how upgrade calculations are going to be any harder than the calculations for new generation sites.

          • Mike Westerman

            Disposal of excavated material, construction of 80km of access roads, churning of a large proportion of the Tantagarra Res volume, transfer of fish disease into the Eucumbene system…
            You can buy water to fill an offstream PHES, no need for a water lease.
            The geotech challenges go up exponentially with depth of cover and length of access tunnels – S2 has both at an unprecedented scale (for Oz). Schemes like Kanmantoo and Highbury have virtually none of these issues.
            It’s still an unknown how NSW and more particularly Vic transmission systems are going to be ungraded to transfer the additional power: NSW max is 3.1GW, Vic is 1.3GW.

    • RobertO

      Hi Jon, and I ask a question, “Is Snowy 2 counting on payments from RE generators as part of its cost / profits under the NEG if it get up?” I have written to my pollies asking them to can the NEG completely.

  • Radbug

    Anyone remember Alpha computers, Franklin cars? No? You don’t make large individual investments in rapidly evolving technology situations. You diversify instead.

    • Alastair Leith

      The point being that turkey nest dam off-river PHES is faster to deploy by more than hal, can be located more strategically (close to demand centres to help with inertia), with more head (vertical fall) and on previously cleared land (i.e. not in a NP of all places), and without a need for very expensive tunnelling.

      • Radbug

        I have read opinions that said the entire Snowy scheme, as envisaged by Chifley could been achieved at a lower cost by building a multitude of smaller reservoirs downstream.

  • Ray Miller

    The questions around Snowy 2.0 are more to do we the risks, costs, timing and smarts being brought to the project. So answering those questions would help, but do not go to Marsden Jacob for answers.
    Before we all get too excited, download the Utopia skit on building the Melbourne city to airport project and tell me the project will not mimic this skit? Series 3 Episode 6

    Maybe Josh could call Elon about trying out his new boring machine to just dig a couple of tunnels to try to get back some cred (and show up Jay) and save us a couple of Billion.
    “is increasing tunneling speed and dropping costs by a factor of 10 or more – this is the goal of The Boring Company”

  • Ian

    Looks like this Snowy 2 is fait accompli. The time may have come to use this as political advantage against the Coalition. The opportunity cost of this project will provide financial poverty to countless other worthwhile projects, many of which would benefit people in far flung places like Queensland, South Australia,Tasmania, WesternAustralia, NorthernTerritory, who will get absolutely nothing from this Vanity White Elephant.

    • RobertO

      Hi Ian, I agree that Western Australia and Northern Territory will get absolutely nothing from Snowy 2, however the others are part of the NEM and they will all benefit because of the interconnects they have. If the Fed Gov tell Snowy 2 to drop prices and if NSW – SA interconnect is built then those state may get cheaper electricity (go fly a kite, possibly twice the price if the COALition has their way). I only marginally support Snowy 2 as there are lots of issues about it.

  • Carl Raymond S

    Who is the seller of coal to Liddell? The station itself wishes to close. The people seeking a clean future want it gone. Even AGL don’t want it. My follow the money nose smells coal money being siphoned off, Liberally.

    This comment is unrelated to Snowy 2, where I am for it. We need big storage to reach 100% RE. Build it. If coal is still a thing, the fight continues.

  • John Stafford

    In discussions I have read there are two factors that have hardly ever been mentioned.

    Firstly, Tasmania has a large amount of dispatchable energy (Hydro) of which much is being used at a time when it could be supplied by intermittent energy from the mainland. Supplying a second inter-connector could enable this, leaving the hydro for use when dispatchable energy is needed. It wouldn’t even need PH for a start although there is potential for that in Tasmania as well, and probably at a much lower capital cost. The second inter-connector would also increase the security of the Tasmanian power supply. There is also potential to increase wind generation in Tasmania, Much of which should be classed as base load because the roaring forties winds rarely stop. The planned Robin Island Windfarm should be fast tracked and with the second inter-connector would benefit both Tasmania and the mainland. How does the economics of using power from Tasmania stack up against Snowy 2.

    Secondly no one has mentioned the vulnerability of our power supply in an armed conflict. One would think that centralised generation and storage systems would be much more vulnerable to attack than lots of smaller generators and storages scattered throughout the country. Thus, in war, a collection of localised facilities would present much better power reliability than the centralised one provided this possibility is included in planning of the network.

    • RobertO

      Hi John Stafford, How do you put a price on security (I all for Bass Link 2 but via King Island and the community benefits (and how do you price that) that Optical Fibre brings.
      Secondlly forget armed conflict, talk about simple storms that diversity providies protection from (and these storms are more likely to happen), and remember our Fossel Fuel supplys come mainly from overseas.

  • Glynn Palmer

    “Turnbull spoke enthusiastically about the need for “dispatchable energy”, but the rhetoric has since been switched to “baseload” and it wants the Clean Energy Finance Corp to fund carbon capture and storage.”
    The government should have access to better and more up to date information than I do. But my reading on LCOE’s discloses that carbon capture and storage for coal burners is unaffordable energy for the Australian situation. The Australian Power Generation Technology report published in November 2015 put an LCOE on black coal supercritical with CCS at $150-$180 /MWh and projected forward to 2030 at $120-$130 /MWh. In comparison forecast 2030 LCOE’s for utility scale PV were $70-$90 /MWh and wind $60-$80 /MWh. Move forward to 2017 and PPA’s for wind and solar have been $55 – $70 /MWh and I have read an estimate of renewables with storage at $93/MWh.

    The Australian Power Generation Technology report LCOE’s did not include CCS transport and storage. They stated
    “To facilitate the implementation of CCS in Australia, one or more CO2 transport and
    storage networks need to be developed. The cost for transport and storage of CO2
    (excluding owner’s and risk-adjusted costs) from power plants in Australia is likely to
    vary from $5–14/t CO2 to almost $70/t CO2. Variations in factors such as operating
    conditions, engineering assumptions, material costs, topography and geological
    characteristics may lead to different costs. The integrated design of capture systems, transport routes, operating conditions and injection strategies may lead to lower costs.”

    CCS facilities that are currently in operation overseas are a commercial input for injection into oil and gas wells to enhance extraction.
    “In January 2017, Petra Nova Carbon Capture, a joint venture between NRG Energy and JX Nippon Oil & Gas Exploration Corporation, announced the start of CO2 capture operations on Unit 8 at the W.A. Parish power plant near Houston Texas. At a capture rate of 1.4 Mtpa, this is the world’s largest post-combustion capture facility at a power plant (the Boundary Dam post-combustion CO2 capture facility in Canada has a capacity of 1 Mtpa). The captured CO2 is used for EOR purposes at an oil field not far from the Houston area.” Australia may not have any suitable oil and gas extraction sites close enough to the source of the CO2 pollution to be economically viable.

    • Miles Harding

      From 2013:

      With many gas fields already producing a lot of CO2, reinjection into these fields is a reasonable proposal, except that…

      Obviously, $5 per tonne is a lot more attractive than $70 per tonne, so the formation immediately adjacent to the CCS power station will be declared suitable for the purpose of receiving quantities of CO2 over the life of the power station. (What are the odds of this being a really bad idea?)

      The other issue that seems to escape the coaltropes is the cost of a new CCS power station (A refit of exisitng is either really expensive or impossible). With wind and solar undercutting existing coal, the chances of a CCS plant being a sound investment is similar to nuclear; essentially zero.

  • Alex Hromas

    All looks great except that the costing of Snowy 2 comes out at $2,400 per kW installed ridiculously cheap for this type of hydro.