I am very supportive of new storage infrastructure that will support dispatchable renewable energy coming on line. I have objected, however, to the Liberal Party’s mischaracterisation of Snowy 2.0 as new generation. It is a storage system that does not generate energy in its own right. In fact, it will use more energy to pump the water uphill than it will generate when the water is released. Its utility will be in releasing the stored renewable energy at the time of day that it is needed.
It is also important to note that Snowy 2.0 is a massive undertaking that has already blown out to 8 years of construction time and over $5 billion to build. At this stage, the project is still going through feasibility studies, so until there is certainty of if and when it will proceed and clarity of its impact on the market, other private sector projects will be delayed.
Snowy 2.0 is a highly concentrated solution to our energy storage needs. It is effectively placing ‘all our eggs in the one storage basket’. The national energy system would be better served with a wider range of smaller storage projects that are geographically spread across the network, faster to deliver, closer to transmission lines and more predictable in their impact on the energy market and other projects. The lack of certainty in Snowy 2.0 is increasing the economic risk of other projects and stalling them from proceeding.
The government should never just build such major projects itself without firstly testing whether there are better private sector solutions available.