Briefing Note | May 2021
Snowy 2.0 is the popular term used to describe a 2000MW pumped hydro project being developed to augment the existing Snowy Mountains Hydro Scheme in NSW.
Pumped hydro is currently the most accessible form of bulk storage for electricity. Bulk storage is essential to the deployment of large-scale renewable electricity generation.
Snowy 2.0 will require drilling 27 kilometres of tunnels through the Snowy Mountains to link two dams to a pumped hydro power station located a kilometre underground.
It was approved by the Morrison Government in February 2019 and will be built by the Federal Government-owned energy company Snowy Hydro. It was nominally given a six year construction period.
The current contracting cost is $5.1 billion, which includes $1.4 billion in Commonwealth grant funding. These costs do not include additional transmission connections, which may add up to another $1 billion to the final cost.
Given the complexity and scale of the project, it is widely believed the cost is likely to increase and time frame of the project will extend to around 2030. But it is expected to be completed.
Other concerns raised include the environmental impact of the construction work and transmission lines, the opacity of the process for allocation of government funds, how it will operate when complete and its impact on other investment in the National Electricity Market.