Snowy Hydro has released an updated business case for its Snowy 2.0 project, increasing the project’s net present value (NPV) to $3 billion. The revised case outlines key revenue streams and underscores the project’s vital role in the National Electricity Market (NEM).
Marsden Jacob Associates were re-engaged in mid-2023 to provide updated inputs for this business case. Despite the unchanged economic drivers since the Final Investment Decision (FID) in December 2018, several significant updates have been made.
The total cost to complete Snowy 2.0 has risen to $12 billion, with the commercial operation date now set for December 2028. Additionally, the project will deliver an extra 200MW, increasing total capacity to 2200MW. This increase is driven by greater integration of variable renewable generation, such as wind and solar.
Since the 2018 FID, the project’s value to the NEM has grown from $2.8 billion to $3 billion. Snowy 2.0 remains crucial for achieving the NEM’s decarbonisation and reliability targets. Snowy Hydro has already secured contracts for 1.75GW of wind and solar supply, enabling 2.9GW of renewable projects. The project will support at least another 6GW of renewable energy by stabilizing intermittent wind and solar power and transforming it into reliable electricity.
Snowy 2.0 provides 350GWh of energy storage, a significant step towards the 640GWh storage target identified by the Australian Energy Market Operator (AEMO) in its 2022 Integrated System Plan. This storage capacity will help absorb surplus renewable production and maintain supply during low renewable output periods.
Construction updates
Located in the NSW Snowy Mountains, Snowy 2.0 is currently 57% complete, with a workforce of 3,000 making substantial progress. At Lobs Hole, tunnel boring machine (TBM) Lady Eileen Hudson has excavated 2km of the 6km tailrace tunnel, while TBM Kirsten is set to begin work on the Inclined Pressure Shaft. The ongoing drill and blast excavation of the power station caverns, which will be among the largest and deepest in the world at 800m underground, continues.
More than 570,000 cubic meters of material has been excavated at the Talbingo intake site. At Tantangara, the intake is just three meters from its full 55m depth, and the tunnel linking the intake and gate shaft is underway, with TBM Florence having advanced 850m into the headrace adit. Progress on TBM Florence had slowed due to hard rock pinching on the machine’s shield, but a specialist contractor is now using high-pressure water jets to remove the obstructing rock.
The headrace surge shaft at Marica has been excavated to a depth of 85m, with a planned depth of 250m. Meanwhile, at the Polo Flat factory in Cooma, over 104,000 concrete tunnel lining segments have been produced, along with 450 of the 7,000 bespoke segments for the Inclined Pressure Shaft.
This updated business case follows revisions to the project’s schedule and costs announced in August 2023.
