• John McDonnell

The Snowy 2.0 project is a costly mistake


When the idea of a second Snowy scheme was proposed in 2016, it was embraced enthusiastically by then Prime Minister Malcolm Turnbull, who was a dedicated supporter of renewable energy. He argued that 'pumped hydro' was the dispatchable power support that was needed to allow emission-free energy generation. Turnbull called it “a nation-building project”.


The current prime minister, Scott Morrison, is also a supporter as is energy minister Angus Taylor, which is surprising given that his family company is the biggest landholder along the Snowy River.


Not everyone is enthusiastic about Snowy 2.0.


On Wednesday, thirty energy engineers and CEOs wrote to The Australian saying that the scheme was a costly mistake. They say:

“Details confirm that the Snowy 2.0 business case, issued almost two years ago by Snowy Hydro, was based on grossly inflated revenues and understated costs. Put simply, the federal government was presented with a profoundly flawed justification.”

They also make the point that the revenue situation has changed since Snowy Hydro first said the project was viable.


The writers also note that the Australian Energy Market Operator (AEMO) says that Snowy 2.0 is likely to be largely redundant.

“On the revenue side, the output of Snowy 2.0 from 2025 to 2042 is now forecast to be less than half the business case estimate, according to the Australian Energy Market Operator.
"AEMO forecasts Snowy 2.0 to be largely idle before 2033, as the existing 1800 megawatt Tumut 3 pumped hydro station can provide most of the forecast output from both stations until then.
"Also, AEMO forecasts Snowy 2.0 would never attain the maximum annual output estimate in the business case”, the engineers say bluntly.
“Not only has output been over-estimated by 100 per cent, Snowy 2.0 is not urgent or critical for the transition to renewable energy, nor itself “renewable”.”

The engineers also say that Snowy 2.0 has negative effects on the environment:

“The financial and technical flaws of Snowy 2.0 are reason enough to halt the project. An equally compelling reason is the recently revealed magnitude of damage to Kosciuszko National Park. The bulldozed moonscape scar along 5km of the Yarran­gobilly River at the Lobs Hole construction site is already visible on satellite images. Much more is to be destroyed across 35km of the park. Most of the 20 million tonnes of excavated spoil is now to be dumped on parkland rather than in the reservoirs”, they say.

It is surprising that Malcolm Turnbull, who prides himself on being an environmentalist, could be happy with this destruction. Moreover, the impact on the river system is likely to be destructive for many species particularly fish.


The engineers make the point about one native species of fish:

“The NSW Department of Primary Industries describes them: 'Stocky galaxias is listed as a critically endangered species. There are heavy penalties for harming, possessing, buying or selling them, or for harming their habitat.' Yet it is now evident that the NSW government has no option but to grant exemptions to its own biosecurity protections to “legitimise” the spreading of declared noxious pests, throughout a national park no less, and beyond — this will be unprecedented.”

Added to this the people of Dalgety, which is close to Angus Taylor’s family property, are worried that the scheme will extract water from the Snowy River system and leave them without enough water for their farms, for which they will not be compensated by the energy producers.


This is a classic example of city politics ending up as bad policy, particularly for the regions.