Snowy 2.0 Project and Business Case Overview
Total Page:16
File Type:pdf, Size:1020Kb
SNOWY 2.0 Project and business case overview 5 Our story 6 The modern Snowy Hydro 7 Our energy assets 8 About Snowy 2.0 9 Snowy Hydro will underpin Australia’s renewable energy future 13 Snowy 2.0 is a commercial investment decision by Snowy Hydro 15 Robust and sound business case 20 Snowy 2.0’s revenue streams 25 National Electricity Market benefits 27 A day in the life of Snowy 2.0 and how this will change 30 Transmission A Page 2 B A Page 3 B 1949 SCALE: 1 : 200 SCALE: 1 : 200 2019 1949 SCALE: 1 : 200 SCALE: 1 : 200 2019 Our Snowy story is well-known. It’s one of vision, engineering wonder, nation building and mateship. Today, we embark on the next chapter with It’s hard now to imagine life without the Snowy a strong vision and a new project. Snowy 2.0, Scheme, so fundamental is its operation to the along with the mighty Snowy Scheme, will daily lives of millions of Australians. However, underpin Australia’s renewable energy future for its development was not inevitable. It took a generations to come. boldness of vision and long-term thinking. It required a willingness to take risks. It was, as The National Electricity Market (NEM) has Prime Minister Ben Chifley declared, the greatest passed the tipping point. Renewables are single project in our history. now the most economic form of new energy generation. With more intermittent generation The real heroes of this venture were, of course, coming into the NEM, the critical role Snowy the diverse community of Australians and Hydro plays in keeping the lights on is more immigrants from war-torn Europe, who worked important than ever. in challenging conditions. Their dedication and sacrifice gave form to what would become one of The Snowy Mountains Hydro-electric Scheme the civil engineering wonders of the modern world. (known today simply as the Snowy Scheme) was the realisation of a long-held dream to harness We are respectful and proud of our history, the potential of the Australian Alps. From the but there’s much more to us today than our beginning, it had a dual purpose: to irrigate the pioneering past. Murray-Darling Basin and provide a source of clean, reliable electricity generation. These two essential functions remain to this day. A Page 4 B A Page 5 B 1949 1 200 1 200 2019 1949 1 200 1 200 2019 Machine hall excavation at Tumut 1, 1957 Guthega Dam The Snowy Hydro of today is a modern, corporations law company. Almost 70 years ago, construction started on the mighty Snowy Scheme. We are the fourth-largest energy player in the Snowy 2.0, like the original Snowy Scheme, is a From those modest beginnings the Snowy Snowy Hydro’s power stations specialise in NEM and provide much-needed competition nation building project. This significant expansion Scheme took shape and is considered to peaking generation. They operate at times of in the market. This helps to exert downward of the Snowy Scheme will provide the storage be one of Australia’s greatest engineering peak demand to keep the lights on across the pressure on energy prices and drives better and on-demand generation needed to balance achievements. NEM states. Snowy Hydro’s peaking generators outcomes for consumers. the growth of wind and solar power and the work alongside baseload energy plants. We Today, Snowy Hydro operates the Snowy retirement of Australia’s ageing fleet of thermal can quickly bring large amounts of generating We are committed to continuing to grow our Scheme (nine hydro power stations including power stations. In short, it will keep our energy capacity online at times of peak demand portfolio of assets, to maximise competition in pumped storage at Tumut 3 Power Station and system secure. (morning/evenings or during hot weather), as the electricity market and deliver more value to Jindabyne Pumping Station), along with six gas well as ‘fill the gaps’ when supply is needed, for consumers. Snowy Hydro is building a portfolio Snowy 2.0 is not only a sound business investment and diesel-fired power stations across New example when wind or solar output is low or a that operates efficiently and reliably in a highly for Snowy Hydro. It also represents the most cost- South Wales, Victoria and South Australia. We baseload generator has an outage. competitive NEM, and Snowy 2.0 and our newly- effective way to ensure a reliable, clean power have a total generation capacity of 5,500MW contracted 888 megawatts (MW) of renewable system for future generations to come. and provide electricity price insurance and other energy from eight wind and solar projects, are products that deliver security of supply and price key to this. Part of the community certainty to customers in the energy market. We currently operate 15 power stations across We are proud to be born and raised in the three states and, through our fast-start assets Snowy Mountains and for almost 70 years we’ve and energy storage capabilities, we keep the considered ourselves one of the community. lights on at times of peak electricity demand. Today, we employ 400 locals to manage the SNOWY SCHEME We employ 2,000 people here in Australia and Snowy Scheme and are a major purchaser of Power stations MW SOUTH AUSTRALIA T3 Tumut 3 1800 local goods, products and services. M1 Murray 1 950 serve over a million customers through our retail NEW SOUTH M2 Murray 2 550 businesses, Red Energy, Lumo Energy and Direct Snowy Hydro backs community organisations WALES T1 Tumut 1 330 Angaston T2 Tumut 2 287 Connect. We are one of the largest providers of and local activities both big and small. We Power BL Blowering 80 Station renewable energy in this country. have a long track record of partnering with the 50MW GU Guthega 60 Colongra JM Jindabyne Mini Hydro 1 Power Station 667MW JS Jounama Small Hydro 14 The next phase of the energy revolution is community on a range of initiatives, including Sydney upon us. The inexorable improvements in the the Country Universities Centre Snowy Monaro, Adelaide economics of wind, and solar power prices, school nurse pilot program in Cooma and Tumut, Londsdale THE SNOWY ACT Police Citizens’ Youth Centres, Young Driver Power Station SCHEME and Australia’s commitments to the Paris 21MW VICTORIA Cooma Agreement, have made a low-emissions future Training Program and the Clontarf Foundation. Port Stanvac Power Station Hydro Gas Diesel all-but inevitable. Snowy Hydro is ready to play We invest millions of dollars in sponsorships and 65MW support about 40 local events throughout the a key role in managing the challenges posed Melbourne region every year. Valley by this transition and underpinning Australia’s Power Station 300MW renewable future. Laverton North Power Station 320MW A Page 6 B A Page 7 B 1949 1 200 1 200 2019 1949 1 200 1 200 2019 Wind and solar energy Snowy 2.0 is a pumped-hydro expansion of the Snowy Scheme which will significantly add to our existing energy generation Why Snowy 2.0 is so critical to the Snowy 2.0’s fostering of new renewables, and and large-scale storage capabilities. NEM and Australia’s renewable additional supply of hydro generation, will create energy future extra competition in the NEM to help lower energy prices for consumers. It will support new The Snowy Scheme, with its 16 major dams, competition from renewables and increase the already has the capability of storing huge Snowy 2.0 will increase the Scheme’s existing upper dam as ‘energy in waiting’ and used to efficiency of the NEM by buying surplus energy, amounts of energy. While this is sufficient for the generation capacity by 2,000MW. Snowy 2.0 generate energy on-demand to power homes using it for pumping and storing it as water current NEM, it will not be enough as we transition has large-scale energy storage capacity of and businesses within minutes, at peak times. (potential energy) in the upper dam, before to a lower emissions economy, powered by 350,000MW hours. It can generate for up to generating when the energy is required by Pumped-hydro helps improve the efficiency of the wind and solar generation that is cheap but with 175 hours at full capacity without refilling. consumers. NEM by absorbing and storing excess energy at supply patterns that are difficult to predict. The The project will link two existing Scheme dams times of low demand. This could mean pumping NEM covers New South Wales, ACT, Queensland, The capacity of Snowy 2.0’s dams will help - Tantangara and Talbingo - through 27km of with excess energy from wind farms generating Victoria, South Australia and Tasmania. ensure the stability and reliability of the NEM underground tunnels and an underground in the middle of the night, and from solar plants even during prolonged weather events, such as power station with pumping capabilities. The supply of electricity in the future will be in the middle of the day, when the demand wind or solar ‘droughts’. Snowy 2.0, along with increasingly generated by renewable sources Snowy 2.0’s pumped-hydro capabilities are for energy is low. Without reliable, large-scale the existing Snowy Scheme, will more efficiently such as wind and on-demand and can be switched on and off storage, excess energy is wasted or curtailed. deliver electricity to the major load centres of solar, as coal-fired power plants progressively at a moment’s notice. Once hydro energy has Sydney and Melbourne at times of high demand.