Snowy Hydro predicts electricity prices will rise due to Snowy 2.0
A Snowy Hydro report recently discovered by National Parks Association of NSW, predicts that Snowy 2.0 will actually push electricity prices higher, not lower as claimed by Snowy Hydro.
NPA President, Anne Dickson stated “Though marked ‘commercial-in-confidence’, the Report is on the Snowy 2.0 website1
“Figure 122 in the Report shows NSW electricity spot prices from 2026, when Snowy 2.0 is supposed to be fully operational to 2047, with and without Snowy 2.0.
“Remarkably, prices are only predicted to be lower with Snowy 2.0 for 3 of the projected 22 years, and prices are similar from 2028 to 2033, but higher for every year thereafter” said Ms Dickson.
The Report was the subject of an article in RenewEconomy on 11 March 20193.
This is completely at odds with what the Minister for Energy and Emissions Reduction Angus Taylor said just three days ago in relation to Snowy 2.0 at the 70th anniversary of the Snowy Scheme. “It will bring down electricity prices, reduce volatility to prices and put downward pressure on electricity bills for all of us while keeping the lights on”.
As NPA’s Paper ‘Snowy 2.0 Doesn’t Stack Up’, released last Tuesday, stated:
“Snowy 2.0 is economically unviable, it trashes the Kosciuszko National Park and doesn’t deliver what it promises. It’s the worst possible project in the worst possible place, and there are many better alternatives.”
Now we can add, “Snowy 2.0 will push up electricity prices”.
Ted Woodley, Treasurer National Parks Association of NSW 9299 0000
Anne Dickson, President National Parks Association of NSW 9299 0000
- (https://www.snowyhydro.com.au/our-scheme/snowy20/fid/ – Final Investment Decision Information – Market Modelling).
- Figure 12: NSW Spot Prices $/MWh [Snowy Hydro Market Modelling Report 2019]
- Extracts from article in RenewEconomy on 11 March 2019:
“The detailed modelling underpinning the investment in the massive Snowy 2.0 pumped hydro scheme confirms the worst fears of many in the industry: it will likely cause wholesale prices to rise in the medium to long term, it will sustain the business models of coal generators, and it will put a huge dent in the battery storage industry.
The modelling, quietly posted on the Snowy Hydro website after the blazing headlines generated from the $1.4 billion injection by the Scott Morrison Coalition government, confirm that the investment is focused more on protecting the future of the government-owned utility than it is about broader benefits to the market.
The most shocking revelation, however, is that in the “base case” modelling, built around current policy settings, wholesale prices on the National Electricity Market would be higher than they otherwise would be in the medium to long term.
The updated modelling also confirms previous observations – including its own earlier modelling and that of the Australian Energy Market Operator – that the existence of Snowy 2.0 is likely to underpin existing coal generators because it will “maintain the economics of baseload supply.”
Indeed, it reveals that Snowy 2.0 will not facilitate any significant increase in variable renewables until the mid to late 2030s, when more coal generation has retired.
Most remarkably, the modelling assumes that Snowy 2.0 will only generate around 2,000GWh a year in its initial three years. (It will pump around 30 per cent more due to round trip losses.). That is barely more than 1 per cent of total output from the National Electricity Market.”