The first power from the Snowy 2.0 pumped hydro project may not be delivered until 2028, it was revealed yesterday, triggering a fresh round of criticism over the controversial project.
The delay is undoubtedly inconvenient. But, despite speculation, the hold-up won’t noticeably slow the transition to renewable energy. The shift is driven by the compelling price advantage of solar and wind over coal and gas.
And in my view, we shouldn’t get too obsessed about exactly when Snowy 2.0 will be finished, or whether it costs more than first envisaged. In huge projects such as these, delays and cost blowouts are to be expected. And Snowy 2.0 offers us many lessons that will benefit subsequent pumped hydro projects.
I’m not an apologist for Snowy 2.0. I would have preferred it wasn’t built in a national park. But Australia’s renewable energy transformation will require a huge amount of energy storage – and the Snowy extension is an important part of the mix.
A big deal for powering Australia
Federal government-owned Snowy Hydro on Wednesday said Snowy 2.0 may not begin initial operation until the second half 2028 and may not be fully online until December 2029. It is also likely to suffer further cost blowouts beyond its current price tag of A$5.9 billion.
The project was originally costed at $2 billion and was expected to start operating in 2021.
In a statement, Snowy Hydro attributed the latest delay to COVID-19, global supply chain disruption, technical complications and geological issues.
Snowy 2.0 is the biggest energy storage project under construction in Australia. Pumped hydro storage involves two small reservoirs spaced a few kilometres apart, one built 400-800 metres higher than the other, with tunnels connecting them.
On sunny and windy days, electricity is stored by pumping water up to the higher reservoir. Later, when energy is needed, the water is released downhill through the turbine to produce electricity. The same water goes up and down the hill for the life of the project.
The Albanese government has set a national target of 82% renewable electricity by 2030 – most from solar and wind. These are intermittent energy sources, meaning they sometimes produce more energy than we need, and sometimes less. Energy storage helps smooth bumps in supply.
Solar and wind energy generation in the national electricity market meets about one-third of demand, up from 1% in 2009 and 9% in 2017. So at the moment, we don’t need much energy storage because existing coal, gas and hydroelectric power stations still help balance electricity demand.
But by 2028, solar and wind are expected to generate about 60% of electricity in the market. By then, many more coal plants will have closed, and we’ll need other ways to balance supply and demand. That’s where Snowy 2.0 and other projects come in.
A suite of options needed
So how do we make sure Australia’s electricity supplies remain reliable throughout the renewable energy transition? With a suite of technologies and projects.
The top priority is lots of new transmission infrastructure – mostly high-voltage cables and associated towers, as well as transformers.
This infrastructure is needed to move power generated by new solar and wind projects in rural areas to the cities, and also between states.
Importantly, strong energy transmission between states hugely reduces the need for energy storage by smoothing out local weather. If it’s a wet, windless week in Victoria, electricity can be sent from New South Wales and South Australia. The following week, Victoria might return the favour.
Many other current and future options exist to balance out electricity supplies. They include:
- off-river pumped hydro
- grid-scale batteries
- hot water storage tanks in homes and factories
- high temperature thermal storage in factories to displace gas furnaces
- activities to reduce electricity demand at peak times (known as demand management)
- legacy gas turbines operating only occasionally
- electric vehicle batteries.
The Snowy 2.0 delays mean other storage methods will take a stronger role in the interim.
Pumped hydro vs the alternatives
Grid-scale batteries are useful for short-term energy storage – seconds, minutes and hours.
Several big battery projects are being deployed in Australia. This includes a project by German energy company RWE, which was just awarded a major NSW government contract. It will generate 50 megawatts of power continuously for eight hours, and so has an energy storage capacity of 400 megawatt-hours.
Australia has about 5,500 potential pumped hydro sites. Since we only need ten or 20 pumped hydro systems, we can afford to be very choosy.
Australia has three operating pumped hydro energy storage systems. Two are under construction, including Snowy 2.0, and a dozen others are being planned including big systems in Queensland and Tasmania.
Pumped hydro uses water, whereas batteries use far more expensive electrochemicals. And hydro systems last much longer than big batteries. It’s not a question of choosing between batteries and pumped hydro. We need both.
Snowy 2.0 will have the capacity to generate 2,000 megawatts of continuous power for a whole week, and so will provide about 350,000 megawatt-hours of storage.
This is 40 times more power capacity than the 50 megawatt RWE battery, and about 900 times the energy storage.
The Pioneer-Burdekin pumped hydro system being developed in Queensland will be able to generate 5,000 megawatts of power for 24 hours. This is 100 times more power and 300 times more energy storage than the RWE big battery.
What about the cost?
Upwards of $6 billion is not an insubstantial amount of money. But Snowy 2.0 would have been a bargain if it was completed for $2 billion. And even at, say, $9 billion, the project is still small compared to the $17 billion Australia spends collectively each year on rooftop solar, windfarms, solar farms, electricity storage and powerlines.
The decision to locate Snowy 2.0 in a national park has been intensely criticised. Indeed, my colleagues and I recently identified several attractive alternative sites for 500,000 megawatt-hour pumped hydro projects just a few kilometres west of Snowy 2.0, outside national parks, which you can see in this interactive map. Each would require only a short tunnel and a single new reservoir.
However, at the time the Turnbull government committed to Snowy 2.0, it was the only large-scale storage option on the table. And it’s now fairly far down the construction track.
Snowy 2.0 is worth doing
Solar and wind could provide virtually all future energy both in Australia and globally.
So for the sake of the renewables transition, let’s hope Snowy 2.0’s technical and financial difficulties are resolved.