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Snowy 2.0 Doesn't Stack Up

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Snowy 2.0 Doesn't Stack Up This Paper, prepared by the National Parks Association of NSW, contends that the case for Snowy 2.0 does SNOWY 2.0 not stack up on either economic or DOESN’T STACK UP environmental grounds Copyright © 2019 National Parks Association of NSW Inc. 15 October 2019 All information contained within this Paper has been prepared by National Parks Association of NSW from available public sources. NPA has endeavoured to ensure that all assertions are factually correct in the absence of key information including the Business Case and financial data. Cover Photo: Thredbo River in Winter. © Gary Dunnett National Parks Association of NSW is a non-profit organisation that seeks to protect, connect and restore the integrity and diversity of natural systems in NSW. ABN 67 694 961 955 Suite 1.07, 55 Miller Street, PYRMONT NSW 2009| PO Box 528, PYRMONT NSW 2009 Phone: 02 9299 0000 | Email: [email protected] | Website: www.npansw.org.au Contents SUMMARY ............................................................................................................................................... 5 RECOMMENDATIONS ........................................................................................................................... 19 DETAILS ................................................................................................................................................. 20 Snowy 2.0 in a nutshell ......................................................................................................................... 21 Timeline................................................................................................................................................. 23 1. Lack of an overall Plan, premature approval before completion of EIS process .......................... 26 1.1. A disconcerting genesis ..................................................................................................... 26 1.2. No comprehensive Business Case for the entire project .................................................. 27 1.3. Disregard for EIS process .................................................................................................. 27 1.4. Lack of robust Government review of the (partial) Business Case or alternatives .......... 29 1.5. Risk of premature approval already demonstrated .......................................................... 29 2. Optimistic estimates and understated costs ................................................................................ 31 2.1. Completion time has more than doubled ......................................................................... 31 2.2. Cost of pumped storage component has increased by 400%........................................... 32 2.3. Minimal allowance for transmission cost ......................................................................... 35 2.4. Total cost could be $10 billion, 500% of the original estimate ......................................... 42 2.5. Even further time and cost increases should be allowed for ........................................... 43 2.6. Cost comparison with ‘greenfield’ pumped hydro schemes ............................................ 44 3. Insupportable subsidies ................................................................................................................ 45 3.1. Why are taxpayers providing a $1.38 billion subsidy? ...................................................... 45 3.2. Did the Commonwealth pay a premium for Snowy Hydro to facilitate Snowy 2.0? ........ 46 3.3. Minimal payment for commercial use of Kosciuszko National Park ................................. 49 3.4. No payment for water ....................................................................................................... 50 4. Economically unviable................................................................................................................... 52 4.1. How could Snowy 2.0 cover its interest payments? ......................................................... 52 4.2. Market benefit is half its cost ........................................................................................... 52 4.3. Estimated Rate of Return is low, and now needs to be recalculated ............................... 53 4.4. How will Snowy 2.0 get sufficient spread between its buying and selling price? ............ 53 4.5. Widespread scepticism of the viability of Snowy 2.0 ....................................................... 54 5. Overstated benefits ...................................................................................................................... 57 5.1. Lack of analysis of claimed improvements to prices and reliability ................................. 57 5.2. Snowy 2.0 is markedly different to other pumped hydro schemes.................................. 57 5.3. How often will Snowy 2.0 be needed to supply 350 GWh? .............................................. 58 5.4. Cycling energy storage capacity (350 GWh) is considerably overstated .......................... 58 5.5. It will take months to replenish Tantangara ..................................................................... 63 5.6. Snowy 2.0 is a net consumer of electricity ....................................................................... 64 5.7. Snowy 2.0 is only 60% efficient overall ............................................................................. 64 5.8. Most pumping electricity will come from coal-fired generators initially ......................... 65 5.9. Limited past operation of Tumut 3 pumped hydro station is cause for concern ............. 67 5.10. Differing representations of Snowy 2.0 operation ........................................................... 69 5.11. Snowy 2.0 is additional to existing plant, forestalling its full utilisation ........................... 72 5.12. Snowy 2.0 may dampen commercial opportunities for other storage ............................. 73 6. Other, better alternatives not analysed ....................................................................................... 74 6.1. Snowy Hydro should reveal why Snowy 2.0 is the best option ........................................ 74 6.2. Why is 2000 MW the optimal size? .................................................................................. 77 6.3. Snowy Hydro hasn’t complied with the regulation requiring analysis of alternatives ..... 77 6.4. The Government should have reviewed alternatives, including outside Kosciuszko ....... 78 7. Unacceptable environmental impacts .......................................................................................... 81 7.1. A project of this size and impact should not even be contemplated in a National Park .. 81 7.2. A 1½ year EIS process ........................................................................................................ 82 7.3. The Main Works EIS has finally revealed the enormity of impacts on the Park ............... 82 7.4. Enormous Project footprint .............................................................................................. 84 7.5. Destruction of threatened species habitat ....................................................................... 85 7.6. Dumping 14,000,000 m3 of waste rock spoil in the Park ................................................. 86 7.7. Twin high voltage transmission towers and lines through Kosciuszko National Park ...... 88 7.8. Permanent damage to Lob’s Hole area ............................................................................ 89 7.9. Tantangara will become a holding tank, occasionally empty and an eyesore ................. 89 7.10. Groundwater levels depressed ......................................................................................... 90 7.11. Transfer of pest species throughout the Snowy and downstream ................................... 91 7.12. Risible biodiversity offset payment so far ......................................................................... 94 7.13. Substantial modifications proposed for the Exploratory Works EIS, lack of consultation 94 7.14. Absence of life-cycle assessment of environmental impact ............................................. 95 8. The Business Case should be revoked .......................................................................................... 96 8.1. Why was the Business Case commercially sensitive? ....................................................... 96 8.2. The flawed Business Case should be revoked and the EIS refused .................................. 96 CONCLUDING COMMENTS ................................................................................................................... 97 APPENDIX A – Characteristics of the World’s Largest Pumped Hydro Storage Schemes ....................... 1 APPENDIX B –Selected quotes from the Paper ....................................................................................... 1 B.1. External Experts .................................................................................................................. 1 B.2. Government/Snowy Hydro ................................................................................................. 2 APPENDIX C “Snowy 2.0 – Is the reward worth the risk?” ..................................................................... 1 SUMMARY On 15 March 2017 Prime Minister Turnbull announced the ‘Snowy 2.0’ pumped hydro-electric storage project: “The Turnbull Government will start work on an electricity game-changer: the plan for the Snowy
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