Snowy Hydro achieves “first fire” at controversial new gas generator

The federal government owned Snowy Hydro has reported what it describes as its “first fire” at its new Hunter Valley gas generator, firing up one of the facility’s two turbines as it works through the commissioning process.

The Hunter Valley Power Project at Kurri Kurri has attracted controversy for a number of reasons – its location, the need to build new pipeline infrastructure, its use of diesel, its delays and its blow out in costs.

The 660 megawatt facility adds to the federal government’s growing fleet of “peaking plant” – including hydro and diesel generators – that the government owned utility switches on in periods of high prices.

Such peaking generators operate rarely but – as the energy regulator has noted – usually bid the market price up to or near the market cap, which is now $20,300 a megawatt hour.

The Hunter Valley project, originally costed at around $600 million when it was announced by former energy minister Angus Taylor as part of the then Coalition government’s so called “gas-led recovery”, and was supposed to deliver its first power in 2023.

The project was commissioned in June – Snowy Hydro says it lost 69 (working) days in 2025 alone due to wet weather – and is expected to be in full operation within a few months, after the first turbine had been ignited and reached full speed for the first time.

“First fire is a turning point in the power station’s development that confirms the design, construction and cold commissioning of the turbine has been successful,” CEO Dennis Barnes said in a statement.

“We’re very proud of the project team, whose hard work and dedication have seen us through a very challenging delivery program.”

Barnes said the project will run only a “minority of time” and will “help reduce pressure on electricity prices, avoid blackouts and cut around five million tonnes of carbon dioxide-equivalent gas emissions annually.”

He said: ”Every megawatt of capacity provided by Kurri Kurri enables three megawatts of renewable wind and solar to come online and replace increasingly unreliable coal generation.

“This represents real change in our energy system that will deliver important benefits to energy users across the grid, while making a difference in Australia’s response to climate change.”

Snowy Hydro said also: “Kurri Kurri Power Station remains on track to be delivered within its target cost of around $1.3 billion.” Which is obviously not its original target.