Snowy hydro’s owners in the dark

Pretty clearly another brain fart:

Malcolm Turnbull declared himself a “nation-building prime minister” as he announced plans to expand the iconic Snowy Mountains scheme, insisting his government was building on the “real courage” and “confidence” of Australians who built the engineering wonder.

While a feasibility study will determine the final design, the most likely new project will include a 27km tunnel and a large turbine hall about 600 metres below ground. It is expected to create 500 jobs.

Mr Turnbull urged other Snowy stakeholders — the NSW and Victorian governments — to contribute additional equity to the commonwealth’s $2 billion in funding, but said his government was committed and “very happy” to invest in the project on a commercial basis.

He spoke to NSW Premier Gladys Berejiklian yesterday — who was “so excited” about the announcement — and Energy Minister Josh Frydenberg spoke to his Victorian counterpart Lily D’Ambrosio and Victorian Treasurer Tim Pallas.

However Ms D’Ambrosio claimed neither she nor Victorian Premier Daniel Andrews had been told anything about the Snowy announcement, despite Victoria owning a 29 per cent share in Snowy Hydro.

“Absolutely nothing,” she told the ABC.

“The news is what we heard on the radio, frankly, and what we woke up to this morning.

“This is the way that the Prime Minister is leading this country, so-called, when he comes up with ideas, doesn’t think them through, has no dialogue with the direct shareholders, the NSW government, the Victorian government, to work cooperatively on these issues, so you really have to wonder how serious he is in terms of trying to show some leadership when he lurches from one announcement to another actually not thinking through any of these issues at all.”

Doesn’t mean it’s a bad idea but let’s have a process, what? Otherwise it could be gone tomorrow.

Houses and Holes
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  1. proofreadersMEMBER

    “Malcolm Turnbull declared himself a “nation-building prime minister” as he announced plans to expand the iconic Snowy Mountains scheme, insisting his government was building on the “real courage” and “confidence” of Australians who built the engineering wonder.”

    Now I realise what is going on – the Trumble government in action is a repeat of the Utopia series on our ABC. Didn’t you just love it the first time?

  2. My personal brainfart is why don’t they use Snowy Hydro as the energy storage “battery” for the entire grid (i.e. pumped hydro) rather than for new generation capacity. I am guessing this would involve building more HVDC links to renewable energy sources, or just into the grid more generally if that’s how it works.

  3. Sounds like something straight of Utopia or Yes Minister – make a ‘bold’ announcement, provide no details, quietly shelve it a few months down the track when the community is whinging about something less important

    • Reminds me of Rudd and his declaration about NT and the lower taxes to attract investment. And then it disappeared (along with Rudd)

  4. As noted in this most excellent report below ;), there isn’t enough transmission to get the existing Snowy capacity out to Melbourne, across to Adelaide or even up to Sydney. That’s why Snowy has peakers near Melbourne and Sydney. So add more time and $$$ for the transmission. Plus, as the report also notes, during heatwaves, transmission outages are far more likely to be reclassified as credible contingencies. Heatwaves are often associated with lightning and bushfires, either of which can lead to a requirement to back off transmission. Compare also the fact the QNI connector was constrained off during the recent Queensland heatwave, albeit due to the siting of a very large generator…

    • The reason that Snowy has peakers in Melbourne and Sydney is because they entered the retail market. Management decided to enter the retail market as they knew that one day their privatisation number will come up and management wanted to ensure that the form of privatisation would be an IPO (where mgmt likely keep their jobs) as opposed to a trade sale to an existing player (where mgmt likely lose their jobs).

      Most of Snowy’s strategy can be understood through this vein. It is all about bulking up so the ACCC wouldn’t let Origin, AGL or Energy Australia buy them. And kudos to management as the State Govt shareholders bought that line and allowed them to buy gas plants when they are a hydro company.

      In the past, Snowy did basically operate as an insurance policy on the NEM. It didn’t really run for generation it would write contracts for retailers to supply in tight times. Snowy could just turn on and supply when the wholesale price was high.

      • Hi Philly Slim, yes I agree with all that. ACCC is actively promoting a fourth gentailer. I am running off our knowledge of transmission constraints from modelling extreme demend events and comments in the media by Paul Broad as to why Snowy invested in Colongra. Once their retail book got to a certain size, they would’ve exceeded prudent wholesale exposure limits without the physical peakers in NSW and Vic (outside the old Snowy region). I worked on the original NSW trading exposure limits (post Pacpower-Powercor debacle).

      • Forrest GumpMEMBER

        Spot on Philly.

        I worked for the Snowy Hydro in trading energy. The plant is only good for peaking. Same goes for a many others. You wait till the price is high, put in your bid, get the green light and close the CB onto the transmission line and away we go….for a few hours…at Max $ per MWH.

        There are many constraints with Snowy Hydro. Moving the sparks (Transmission) from the mountains to either Sydney or Melb is a big and costly issue. The inter connectors and sub stations dont have the capacity to carry the energy that Turnbull is spruiking. Even if it does, the extra MW is 2/5’s of Fark all.

        Basically Turnbull is offering $2 billion (out of the Fed budget) and the states need to put up the rest. And that will provide capacity for 500,000 homes..(So Turdbull says). Maybe its a better idea to hand out $4,0000 to 500,000 homes or businesses at the load centres of Melb and Sydney so they can install rooftop solar & generate & store for themselves and feed directly back into the grid. No more tran$mission line$ needed. Much cheaper…Much quicker solution and delivers the energy right into the heart of the load base….Just a thought….

      • Thanks for the posts. Especially following on my post yesterday about pain and loss of the country under the Snowy Scheme. The politicians behave too many times like children without knowledge or accountability.
        Vic has put up min feed in tariff for roof top solar to 11 cents.

        Agree the allocation of the money to roof top solar and storage in proximity outside would be a vastly superior solution.

  5. I dunno about that, about 3 weeks ago a head hunter rang me if I knew of any good major project estimators for a job doing feasibility studies in Cooma/Canberra region. Presumably SMEC. Background power stations, piping, structural, mechanical, tunnels.

    • Kinda does Azaros. In three weeks, they’ve found all the expertise to develop and cost the plan announced today and will commence construction next year. Sounds very dubious to me.

      • A 3 week estimate for something like that is not that hard, an AACE class 4 or even class 3 estimate . Put a dozen or so estimators and engineers on the job for 3 weeks Hit the tier 1’s for budget unit rates for civil and tunneling costs, quickly (emails are much faster than posting supplier enquiries 50 years ago) go overseas to get budget quotes for turbine generators and all the machinery as its all imported these days. I kid you not, the local content of the old Snowy Mountains Scheme finished in 1974 has a lot more local content that any planned Turnbull project. We used to design and make things here, electric motors, electrical gear, even some of those huge pumps – parts were cast in Sydney or Melbourne foundries. All those industries are now gone.

  6. Is it true the Snowy only puts out ~4% of our needs……?

    Another 50% will still be SFA if it’s true!

    • turncoatMEMBER

      It has high capacity (MW) / low energy (MWh)

      But you don’t need much energy if you’re just dealing with extreme peaks.

    • it is not a baseload supplier. Snowy holds their powder until the price is high and turns on. There is no point running down the dam capacity unless you are getting paid well for it.

  7. ErmingtonPlumbingMEMBER

    If a Genuine commitment was made to push ahead with this project,…how long would it be before the first of these new turbines begin to turn.
    6-7 years?,…. 10 or more?
    And no new Dam proposed or a mention of the Snowy river environmental flows.

    How does this announcement address the current energy debacle we face right now?

    • Right on . . .
      Not to also mention the fact that the 250,000 households that this scheme will provide power for will be more than taken up just by immigration in the next few years. So we will be no better off. What then?