Water Wise: Time To Kill Off Snowy 2.0 Pumped Hydro White Elephant

Wind and large-scale solar are doomed, but the saviour is said to be pumped hydro; paid for, of course, with other people’s money.

Touted by ex-PM Malcom Turnbull and his hapless sidekick, Josh Frydenberg as the Nation’s mega-battery, the heavily-hyped Snowy 2.0 pumped hydro scheme (shelved in the 1970s because it was uneconomic then) has been heralded as the saviour for the Australian wind industry.

The line goes something like this: if we use 3 MWh of wind power to pump water through 27 km of tunnels, over an elevation of 900m, later, when power consumers actually need it, Snowy Hydro could return 2 MWh to the grid.

Never mind squandering 1/4 to 1/3 of the electricity originally generated; never mind that with the inclusion of the $85 per MWh REC the cost of the wind power involved exceeds $110 per MWh; never mind that the owners of Snowy 2.0 will charge a further $150-300 per MWh to re-deliver power to the grid; never mind that, in reality, the power used to pump the water uphill will largely come from coal-fired power plants, delivered overnight when it’s cheapest.

At a time when the Federal government has earmarked over $300 billion of taxpayer’s money to be spent pump-priming the economy back to life – having throttled the life out of it in response to the COVID-19 virus threat – it seems reasonable to ask whether Snowy 2.0 is worth the starting price.

A group of highly qualified engineers and energy experts have already reached their conclusion: kill it off, before we waste another nickel on a colossal white elephant.

Open Letter to Prime Minister Scott Morrison and Premier Gladys Berejiklian
Multiple signatories
24 March 2020

Expensive, damaging and unnecessary – Snowy 2.0 must be publicly reviewed before proceeding

Dear Prime Minister Morrison and Premier Berejiklian,
We hesitate to divert your attention away from the unparalleled challenges facing our nation from the escalating coronavirus pandemic. But we are very concerned about the merits of the Snowy 2.0 pumped hydro storage project and the possibility of it proceeding without independently validated justification.

We appeal to you both to commission a comprehensive public review of Snowy 2.0 and alternative energy management options before the Commonwealth Government considers its final approval for the project and the NSW Government completes its assessment of the Environmental Impact Statement.

We request that the review be undertaken by the Productivity Commission, and/or Infrastructure Australia, and/or the Commonwealth Chief Scientist and NSW Chief Scientist & Engineer, and include independent experts of international standing.

When the Snowy 2.0 pumped hydro storage project was announced in March 2017, energy industry experts were sceptical about its merits. That scepticism has consolidated as information has emerged. It is now evident that Snowy 2.0 will cost many times its initial estimate, not deliver its claimed benefits and permanently damage Kosciuszko National Park to an unprecedented extent.

In particular, Snowy 2.0 will:

• lose around 40% of the remote source energy that is ultimately delivered to consumers after transmission and pumping/generation cycle losses are taken into account. Snowy 2.0’s losses are more than other pumped storage schemes due to its distance between reservoirs (27km) being far longer than any scheme in the world, and its remoteness from load centres and source generators. Also, its losses are far greater than other energy storage options, such as batteries connected to rooftop solar panels (~10%) or controlled demand response (zero loss).
• require substantial transmission works to connect to the grid, costing billions of dollars. The best location for energy storage is at or near major load centres (e.g. Sydney or Melbourne), not 500km away, in order to minimise transmission upgrades, energy losses and constraints.
• store electricity from coal-fired power stations, not renewable generators, well into the 2030’s.
• lead to more, not less, greenhouse gas emissions. Over 50 million tonnes of CO2e will be incurred during construction and the first 10 years of operation (applying Snowy 2.0’s pumping projections). Such additional emissions counter NSW’s net zero target and bring an associated cost to the Australian economy of over $100m per annum.
• be largely unused until 2030 – as confirmed by recent AEMO projections and evidenced by the historically low use of the pumped storage component of Tumut 3 station.
• rarely have the claimed 350GWh of storage capacity; taking 3+ months to recharge from empty.
• cost at least 500% more than its initial $2 billion estimate. A $5.1bn contract has been awarded for part of the project, with further costs to be added (other works, financing, transmission, contingencies etc). Snowy 2.0’s increasing costs and scheduling (initially to be completed by 2021, now 2025) give little confidence of no further increases, particularly with the poor record for delivery of infrastructure projects in Australia.
• cost more than its market benefit of $4.4 – $6.8bn (as estimated by Snowy Hydro, though likely to be optimistic), bringing into doubt its financial viability and value to the community.
• increase, not decrease, average electricity prices (according to Snowy Hydro modelling).
• convert extensive areas of Kosciuszko National Park into construction sites (for 8 years), with permanent negative impacts over thousands of hectares of the Park and beyond, including:
  • 14 million cubic metres of excavated spoil dumped in the Park, on land and in Snowy 2.0’s reservoirs – with some contaminated by naturally-occurring-asbestos and potentially-acidforming rock
  • two double-circuit 330kV transmission lines, running 10km through the Park in a 120m-wide easement
  • depressed water tables and stream flows above sections of the tunnel
  • over 100km of new or upgraded roads and tracks
  • destruction of 1,000 hectares of habitat for 14 threatened species
  • spread of pest fish, diseases and weeds throughout the Snowy Scheme and downstream rivers, devastating the aquatic environment and recreational fishing, and probably driving an entire species, the Stocky Galaxias, to extinction. Snowy Hydro have applied for an exemption from he NSW Biosecurity Act to avoid prosecution for such illegal actions.
  • a legacy of infrastructure and landscape scars across 30km of the Australian Alps
  • compounding the recent bushfire damage to the National Park and countering its recovery.

Snowy 2.0 is not as it has been publicly portrayed. There are many alternatives that are more efficient, cheaper, quicker to construct, and incur less emissions and environmental impacts – e.g. other pumped hydro, potentially even within the Snowy Scheme, batteries (especially longer duration and electric vehicles), controlled demand response, renewable hydrogen (within a decade or so).

Snowy 2.0 should not proceed on the basis of overstated claims that have never been tested. At stake are billions of dollars of Australian taxpayers’ money, tens of millions of tonnes of greenhouse gas emissions and thousands of hectares of Kosciuszko National Park.

We consider an independent review to be essential, so that Snowy 2.0’s claims can be publicly and transparently tested.

Yours sincerely,

Steve Blume  MAIE, MACS, MAICD President, Smart Energy Council; Director, Australian Institute of Energy;
Treasurer, Global Solar Council

Robert Burns BE, MEngSc, MIEAust, MIEEE former Senior Power System Operations Engineer, Electricity Commission
of NSW, Pacific Power, Eraring Energy

Dan Cass BSc(Hons1) Energy Policy and Regulatory Lead, The Australia Institute; Research Affiliate, University of Sydney Business School

John Dembecki BE(Hons1), ME, FIEAust former System Control Engineer, Electricity Commission of NSW; Member, Snowy Mountains Council Operations Committee; Chair & General Manager, Energy Authority of NSW; Professorial Fellow, University of Sydney School of Electrical Engineering

Bruce Donald AM LLM(Harv) Media and environment lawyer; former Partner, Allens; General Counsel ABC; Chair Environmental Defenders Office; Australian Heritage Commissioner

Gary Dunnett BA(Hons1) Executive Officer, National Parks Association of NSW; former Regional Manager, NSW National Parks & Wildlife Service

Penelope Figgis AO BA(Hons1) Vice Chair Oceania, IUCN World Commission on Protected Areas; former Board Member, Uluru-Kata Tjuta National Park, NSW Environmental Protection Authority, Australian Tourist Commission, Sydney Olympic Park Authority

Dr Sid French BE, PhD, MIEAust, NER Structural engineer, major power and water infrastructure projects; former Director, Worley Ltd

Peter M Garlick BE, MEngSc Managing Director, P M Garlick & Associates (power generation planning specialists); former Consultant Power Engineer, World Bank and Asian Development Bank; former Director, Queensland Generation Corporation

Peter Graham DipBus, PMD(Harv), MAICD former Chief Executive Officer, Pacific Power; Chief Operating Officer, Fairfax Media; Chief Operating Officer, University of NSW

John Hancox former Chief Executive Officer, Clyde Engineering Division, Clyde Industries Limited

Adj Ass Prof John Harris BVSc, PhD Centre for Ecosystem Science, University of NSW; river ecology and fisheries science

Emeritus Prof Max Irvine BE, PhD, FIEAust, FIStructE, NER former Head, School of Civil Engineering, University of NSW

Rusty Langdon BFA, M.Sustainability Post-graduate student, Sustainability Assessment, University of Sydney

Ass Prof Mark Lintermans BSc(Hons), MSc Institute for Applied Ecology, University of Canberra; former Chair, Australian Society for Fish Biology Threatened Fishes Committee

Emeritus Prof Ian Lowe AO FTSE, BSc, PhD, DSc Science, Technology and Society, Griffith University; Adjunct Professor, Sunshine Coast University, Flinders University; former President, Australian Conservation Foundation

Dr Gavan McDonell DEng, PhD, MA, BE, FTSE, FIEAust former Sole Commissioner, NSW Enquiry into Electricity Generation Planning; Senior Banker, European Bank for Reconstruction and Development; Senior Economic Consultant, National Electricity Market;
Adjunct Professor, University of NSW

Ass Prof Dr Bruce Mountain ME, PhD Director, Victoria Energy Policy Centre, Victoria University

Dr Hugh Outhred BSc, BE(Hons1), PhD, FAIE, Life Member IEEE Managing Director, Ipen; former Professorial Visiting Fellow in Energy
Systems, University of NSW

Nancy Pallin BA(Hons) Director, Paddy Pallin Pty Ltd; Paddy Pallin Foundation

Rob Pallin Chair, Paddy Pallin Pty Ltd; former Chair, Nature Conservation Council of NSW; former Member, NSW Environment Trust

Dr Bruce Robins BSc(Hons1), PhD Director, ROBINSOLAR; former Head Project Development, BP Solar International; former Head Projects, Energy Authority of NSW

Jim Ryan BEng(Civil) former Engineer, Snowy Mountains Hydro-electric Authority; Executive Engineer, Snowy Mountains Engineering Corporation

Hon Ass Prof Hugh Saddler BSc(Hons), PhD Crawford School of Public Policy, Australian National University

Max Smith BE(Elec) former General Manager Retail, Great Southern Energy

Prof Andrew Stock BE(Hons1), FIEAust, FAIE, GAICD Councillor, Climate Council; Enterprise Professor, University of Melbourne; former Director, Clean Energy Finance Corporation; former Senior Executive, Origin Energy

Hon Ass Prof Don White BEng, FIChemE, CEng, AMICDA Engineering, University of Sydney; Chair, Nature Conservation Council
NSW; Member, NSW Environmental Trust; former Board Member, Environment Protection Authority of NSW

Dr George Wilkenfeld BArch(Hons), MPhil, PhD Director, George Wilkenfeld & Associates Energy Policy Consultants

Ted Woodley BSc, BE(Hons1), FIEAust, FAIE, FIML, FAICD former Managing Director, PowerNet, GasNet, EnergyAustralia,
GrainCorp; former General Manager Power Systems, CLP (Hong Kong); Hon Treasurer, National Parks Association of NSW

Dr Graeme L Worboys AM BSc, MAppSci, PhD (Honorary) Associate Professor, Fenner School, Australian National University; former Regional Manager (inc. Kosciuszko National Park), NSW National Parks and Wildlife Service; co-author, Kosciuszko: A Great
National Park, Envirobook, 2020 (in press)
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