Snowy 2.0 : Technically Feasible, Financially Viable, Very Expensive

Snowy 2.0 feasibility study

Snowy Hydro’s feasibility study on the Snowy 2.0 electricity generation expansion and pumped hydro storage project has been completed. It’s doable says the company, but it won’t be cheap.

The Snowy 2.0 project will increase generation capacity by up to 2,000 megawatts and provide approximately 350,000 megawatt hours 1 of energy storage when at full capacity.

To be situated around halfway between Melbourne and Sydney, Snowy 2.0 would link Tantangara and Talbingo Reservoirs via approximately 27 kilometres of tunnels. A hydro power station is to be constructed at the middle point between the reservoirs, built almost 1 kilometre underground.

This  power station would feature “reversible turbines”; enabling water to be pumped back to the upper reservoir (Tantangara) during times of low electricity demand, using surplus energy provided by renewable sources such as wind farms (or brrr …coal?). This water is referred to as “energy-in-waiting”.

The company says Snowy 2.0 won’t impact on downstream water releases and won’t use any additional water.

“By moving or recycling water between our existing storages, it gives us more flexibility to manage our water, especially in times of drought,” says Snowy Hydro’s Guy Boardman.

What Snowy 2.0 Will Cost – And Who Will Pay?

The current estimate for the project is a whopping $3.8 – $4.5 billion; far higher than initial guesstimates of around $2 billion. Commenting just prior to the report’s public release; Snowy Hydro Chief Executive Paul Broad said the company would pick up the tab and there will be no cost to taxpayers.

However, RenewEconomy’s Giles Parkinson states the feasibility document says Snowy 2.0 is only viable if Snowy Hydro stops paying dividends to its government owners – so in effect, a tax-payer subsidy. The RenewEconomy article also raises other thorny questions about the project.

UPDATE: David Leitch has also published his take on Snowy 2.0.

Assuming it goes ahead, the first power generated from Snowy 2.0 is expected in 2024.

The company claims while other technologies can be implemented if Snowy 2.0 is not built, such as battery storage and gas peaker stations, Snowy 2.0 is “by far” the cheapest option.

“Snowy 2.0 has significant benefits for consumers. By pairing new dispatchable renewable generation with large scale energy storage, Snowy 2.0 will make renewables reliable and lower future energy prices,” says the feasibility study summary. “Snowy 2.0, along with the existing Snowy Scheme, will underpin an orderly transition from coal to renewables and help Australia meet its global climate change targets.”

Snowy Hydro’s independent Board of Directors has approved to progress the Snowy 2.0 project from the feasibility stage towards final investment decision, and to pursue further related work and project refinements.

A summary of the feasibility study can be downloaded here.


  1. It’s been estimated 450,000 megawatt-hours of energy storage is required in Australia to support a 100 per cent renewable electricity system. However, the estimate didn’t envision the majority of it being in one spot
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.


  1. Keith James says

    Not viable, not relevant and not by 2024! More holes than a dyke.

  2. Ronald Brakels says

    In comparison, the Kidston pumped hydro scheme in Queensland will be around $1,200 per kilowatt compared to perhaps $2,100 for Snowy 2.

    Snowy 2.0 will store about twice the energy per kilowatt of power output, but it is the first couple of hours of storage that is the most valuable.

    While Kidston might be a particularly favorable location, it would still be worth looking into whether or not multiple small pumped storage sites can beat Snowy 2.0 on price.

  3. Des Scahill says

    I’m completely over the various fallacious/misleading arguments used to ‘seemingly justify’ outlays of vast sums of money on projects that don’t really make sense.

    Just to illustrate how prevalent ‘nonsense’ is these days, back in 2016, a New Zealand associate professor was asked to present a paper at a scientific conference, about a subject he knew absolutely nothing about. With typical kiwi sense of humour, he submitted a completely nonsensical paper on nuclear physics, and to his complete astonishment had it accepted and was asked to present it at the conference: See:

    Just to look at the numbers (based on a $1 billion being equal to $1000 million), the 4.8 billion cost quoted for Snowy 2 can be written as $4,800,000,000. There will be roundabout 11,000 households by 2026 (according to ABS projections summarized here in an easy to read graph: )

    Dividing one by the other on my trusty solar powered calculator, (which btw works well at night because its got a battery), it seems that my household (and yours too) are going to have cough up (in one way or another) a rather breath-taking $436,363 each to pay for this.

    Whether we pay this more noticeably through increased bills or indirectly through increased costs of operation to the businesses we work for, or buy stuff from, being passed onto us through the higher prices they will out of necessity have to charge us, or the smaller wages they pay, doesn’t really matter.

    Even if the cost is spread over 20 years I still don’t like the idea of ‘paying’ $21,818 a year either. And let’s not lose sight of the fact that this figure only covers the initial capital outlay, not ongoing operation costs.

    Intertwining with the power generation of Snowy 2 is also the importance of the irrigation water it provides to agricultural industries in the Murray-Darling Basin. Expanding the dam capacity simply to secure water supply is one thing, trying to piggy back on top of that to generate ‘renewable; energy is another.

    We can learn something I believe from our ‘cousins’ in NZ, a country that prides itself as having 100% of its power needs met via ‘renewable’ energy sources.

    Their policies worked well for some time, however three things were overlooked.
    – the amount of capital expenditure needed to provide and maintain power generation meant that much less money was available to refurbish/renew the distribution system to eventual end consumers. That of course is quite similar to the Australian situation – ie out-dated distribution infra-structure in long established centres of population..

    The retail distributors in both countries have responded in much the same ways – ever increasing standing charges, complex pricing schemes etc. With most NZ distributors,virtually all ‘new’ customers these days have to install a smart meter, and sign up for a two year contract period. If you decide you don’t like the distributor and want to switch to another you’ll likely get charged ‘break fees’ if the two year period is not over.

    I don’t really buy the ‘unreliable’ argument advanced by opponents of solar either. All I know is that every morning since I was born, the sun ‘s always been there, and I have great confidence that when I wake up to-morrow, it will still be there.

    As their demand grew, the ‘lines and poles’, sub-stations etc
    – extreme weather events caused some problems with wind generation systems
    – previously reliable hydro power supply impacted by unexpected lengthy droughts, thus reducing river flows.

    • Ronald Brakels says

      11 million households.

    • Des Scahill says

      Oops ! Yes – its 11 million households. Being greatly mortified by forgetting something as simple as checking the LHS scale on the graph, I even dashed outside near noon to make sure the sun was still there (just in case I’d got that wrong too)

      But I’m still unhappy about being slugged $43,636 just the same.

      I messed up the ending too. Three issues which affect the overall supply and generation of electricity in NZ are:

      1) impact of ‘droughts’ and/or reduced rainfall levels on hydro power generation . Warnings about this began as far back as 2001 I believe

      2) earthquakes

      3) economies of scale are hard to achieve in NZ. Until 2015, solar PV systems were relatively few, and even as recently as March 2017 there were only 3134 solar power systems installed in Auckland for example ( see

      but… that seems about to change.

      • Randall Mathews says


        • The joys of a misplaced decimal 🙂

          • Des Scahill says

            Fake news is everywhere these days.

            My solar powered battery-backed up calculator nearly overheated its milliwatt circuits struggling to handle all the zeros.

            Even worse, the human brain draws 20 watts at rest, and 40 watts when working. I’m a bit worried that being out in the hot QLD sun for too long may have melted something internally,

            Not to worry, I’ll wear a Faraday cage hat ( woven from aluminium foil) before I venture outside again

        • Des Scahill says

          The the costs could rise MUCH more…. ”The costs could rise more, depending on whether it can overcome serious engineering hurdles that it has not yet analysed, and if it needs a bigger shovel.

          These costs do not include the cost for new poles and wires into Victoria and NSW, which would add another $2 billion to be paid by consumers.”

          To quote from the highly redacted summary release of the feasibility study: ‘The Project will not be feasible without adequate and deep transmission augmentation to increase the
          capacity of the transmission lines between the Scheme and the load centres in NSW and Victoria…
          Despite being an integral part of the feasibility investigation, … transmission design, construction and funding are
          matters that Snowy is consulted on but does not control.’

          What it all boils down to is at this stage no-one seems to have any idea at all of what the final ‘cost’ of delivering the power to the final end consumers is actually going to be, little if any of the power will be reaching them anyway until 2025 at the very earliest; and ‘some-one’ will have to eventually repay any loans raised to fund the exercise.

          Increasing our long-term national reliance on ‘hydro’ when all the signs are that global temperatures will continue to rise seems… well… a little dubious.

          We may well still be left with a somewhat ‘out-dated’ distribution system at the end of it all too.

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