Ted Woodley, Hon Treasurer of the NSW National Parks Association. Former Chief Executive in the energy industry including PowerNet, GasNet, EnergyAustralia and CLP Power Systems (Hong Kong).
After the recent bushfire apocalypse, the stark realisation that our planet is suffering and our climate is changing more rapidly than anyone had envisaged has spurred numerous knee-jerk ‘solutions’ to reduce greenhouse gas (GHG) emissions. One such ‘solution’ being touted is the Snowy 2.0 pumped hydro project.
How can this be? Snowy 2.0 will incur tens of millions of tonnes of greenhouse gas (GHG) emissions and have a devastating impact on Kosciuszko National Park over the very period the Park needs nurturing to recover from the fires.
To list but a few more shortcomings, Snowy 2.0 is a most inefficient storage, runs against the trend of power system decentralisation, will push prices up and its cost will exceed its benefits.
Snowy 2.0 will lose approximately 40% of the energy it stores
A fundamental though often overlooked fact is that Snowy 2.0 will not be a net generator of energy, but instead a net consumer of energy. Unlike hydro power stations that simply generate electricity as water flows downhill, pumped hydro stations must first pump water uphill, consuming considerably more energy than generated.
After accounting for losses in the pumping/ generation cycle (~25%) and the network (~10% each-way for pumping and generating), Snowy 2.0 will lose approximately 40% of the energy it stores (Figure 2) – i.e. 100 units in, 60 units delivered.
Snowy 2.0 will be just about the most inefficient energy storage on the National Electricity Market (NEM)
Snowy 2.0 has higher water friction losses than other pumped hydro stations due to the 27 km tunnel connecting its two reservoirs; far longer than any known pumped hydro station in the world. Typically, the distance is less than a few kilometres; for example, the Tumut 3 pumped hydro reservoirs are 500 metres apart.
Also, Snowy 2.0 losses are much higher than other forms of storage. For example, the latest batteries lose less than 10% of energy stored, with further improvements in efficiency, capacity and cost expected. When located at consumer premises, batteries incur no network losses at all, having an overall loss one-quarter that of Snowy 2.0 (Figure 2).
Snowy 2.0 will be a coal-fired storage for the next decade or so
A further fundamental though often overlooked fact is that, whilst water is the ‘medium’ for storing and generating energy, it is the energy used for pumping that water uphill that actually powers the storage process.
For the next decade or so it will be coal-fired generators, not renewable generators, that power Snowy 2.0 pumps, perversely increasing GHG emissions. This is because pumping requires additional generation than would otherwise be the case, triggering production from the marginal (highest priced) generator, which would invariably be a coal-fired generator until they are all retired.
Snowy 2.0 will incur 50+ million tonnes of greenhouse gas emissions
Independent analysis has estimated that Snowy 2.0 will incur over 6 million tonnes of CO2-equivalents (CO2-e) for its construction. Further, pumping with coal-fired power will incur emissions rising to over 5 million tonnes per year, assuming Snowy 2.0 operates to the extent forecast by Snowy Hydro.
Emissions from construction and the first decade of operation total some 50 million tonnes of CO2-e. (To put this figure in context, 1 million tonnes of CO2-e is equivalent to the annual emission of 440,000 vehicles).
By contrast, energy storage located at solar/wind farms or consumers’ premises with solar cells incurs zero emissions, as it collects renewable energy directly (see Figure 3).
Snowy 2.0 will incur higher network losses than other energy storages and be more vulnerable to weather risks
Contrary to the assertion that Snowy 2.0 is ideally situated between the two major load centres of Sydney and Melbourne, the best location for storage in order to minimise network losses and constraints is at a renewable generator or load centre, not 500 km away. Snowy 2.0’s network losses will be higher than practically all other energy storages.
Also, Snowy 2.0 is vulnerable to transmission constraints, as was demonstrated by the recent bushfire-triggered outages of Snowy substations and transmission connections to Sydney and between NSW and Victoria. Our ‘new normal’ climate augurs increasing weather risks from heatwaves, winds, storms and floods. Snowy Hydro echoed such concerns, “warning of the rising bushfire risk along the east coast spurring the need for critical electricity transmission lines to be built through the west of the states in non-forested areas less prone to fires”. However, for Snowy 2.0, the electricity would still have to get to and from the west of the state.
Further, Snowy 2.0 requires billions of dollars of transmission works (in the same vulnerable areas) to enable power to flow to and from the grid.
Snowy 2.0 runs against the trend of a decentralised NEM
The overall trend of electricity supply is away from large power stations and storages towards a dispersed system of multiple generation sources and storages, particularly at consumer premises (e.g. roof top solar cells with battery storage).
This trend leads to greater efficiency, minimal network losses, less expenditure on network additions and shields consumers from system outages and faults. It also provides for gradual additions to the NEM rather than lumpy additions like Snowy 2.0.
Snowy 2.0 cannot be justified until Tumut 3 pumped hydro station is fully utilised
Contrary to statements that Snowy 2.0 is needed today, it cannot be justified until the existing 1,800 MW Tumut 3 pumped hydro station is operating at full capacity. Over the past decade Tumut 3 has pumped on average for only 280 hours/year (i.e. 3% of the time). Snowy Hydro modelling shows Tumut 3 continuing to operate below capacity into the 2030’s.
Snowy 2.0 will push prices up, is uneconomic and its cost will exceed its benefit
Contrary to public statements, wholesale electricity prices are predicted to increase as a result of Snowy 2.0 (according to Snowy Hydro modelling – Figure 4).
When announced in March 2017, Snowy 2.0 was to be completed in 4 years at a cost of $2 billion. Completion is now estimated to be in 2025 at a cost of $3.8 to $4.5 billion, even though an 8-year contract has recently been let for $5.1 billion. Industry experts predict the total cost will be around $10 billion when other components (e.g. financing, transmission) are added (Figure 5), warning that even this may be exceeded as large infrastructure projects rarely come in on budget.
Whatever the final cost, it is almost certain to be substantially more than Snowy 2.0’s estimated market benefit of $4.3 to $6.6 billion (which is also considered by industry experts to be optimistic).
Why build a project whose cost exceeds its benefit, potentially by double, and that will increase electricity prices?
Snowy 2.0 will permanently damage Kosciuszko National Park
Lastly, but most importantly, the bushfires have reminded us that our National Parks are irreplaceable jewels. They need greater protection to preserve biodiversity and ensure future generations can experience Mother Nature untarnished by humankind and massive infrastructure.
Snowy 2.0’s construction ‘project area’ of 250,000 ha encompasses one-third of Kosciuszko National Park (Figure 1), much of which has been razed by the recent fires.
Snowy 2.0’s legacy will encompass:
- 10,000 hectares (100 km2) of the Park, and include 14 million cubic metres of excavated spoil (some contaminated with naturally occurring asbestos and potentially acid forming rock), with over half to be dumped in Snowy reservoirs;
- four high voltage transmission circuits on twin towers with a 120 metre-wide easement for 10 kms;
- over 100 kms of new or widened roads and tracks;
- depressed water tables above sections of the tunnel;
- destruction of 1,000 ha of habitat for 14 threatened species;
- the spread of pest fish throughout the Snowy Scheme and downstream rivers; and
- the visual blight of infrastructure and scars across the alpine landscape.
‘Biodiversity offset payments’ from the damage are mooted to be $250 million – an unprecedented amount, reflecting the scale of destruction.
How can an industrial project incurring such damage even be contemplated in a National Park?
There are numerous pumped hydro alternatives to Snowy 2.0 that would cause minimal environmental damage and be more efficient, both within the Snowy Scheme and elsewhere in NSW/Victoria. There are also other energy storage alternatives, including batteries, demand response, hydrogen etc, with undisputed potential for significant technical improvements and cost reductions over the 100-year life of Snowy 2.0, that won’t incur GHG emissions.
It is manifestly clear that Snowy 2.0 is not as it has been portrayed and it is well time for the Commonwealth and NSW governments to undertake a comprehensive, independent review; something that should have been done at the outset.
The latest forecasts by the Australian Energy Market Operator (AEMO) indicate that Snowy 2.0, or its equivalent, is not required until 2029. There is no need to proceed hastily on the pretext that Snowy 2.0 is urgently required and is the only available option for energy storage.
It would be tragic if Snowy 2.0 was constructed on the basis of overstated claims that were never tested and later proven to be false. At stake are billions of dollars of taxpayers’ money, tens of millions of tonnes of additional greenhouse gas emissions and thousands of hectares of Kosciuszko National Park.
Figure 1 – 250,000 ha ‘Project Area’ (Snowy 2.0 EIS Figure 4)
Figure 2 – Snowy 2.0 losses compared to batteries with roof top solar cells at consumer premises
Figure 3 – Snowy 2.0 cumulative greenhouse gas emissions (NPA)
Figure 4 – NSW Spot Prices with and without Snowy 2.0 (Snowy Hydro1)
Figure 5 – Ever-increasing Capital Cost Estimate (NPA)