Opinion/Comment, Politics

Snowy 2.0: The madness continues

As so many readers of Coffs Coast Outlook are interested in renewable energy I thought they might be interested in the following article on Snowy 2.0. If nothing else it indicates clearly why we’ve gone from some of the worlds cheapest power to some of its most expensive.

Andrew – Reader

By David Bidstrup

I first looked at the proposed “Snowy 2.0” project in August 2017, just after it was announced as yet another “game changer”. “The Australian”, (2 March 2018), reports it“will provide additional generation capacity 0f 2,000 MW”, which is a bit misleading because (a): we are interested in energy, that is how many MWh it can produce and (b): it is not a “generator”; it is a nett user of electricity.

In August 2017 the project output was stated as 350,000 MWh over one week.

Using a reasonable 80% efficiency for the scheme, (basic physics tells us here are no “free lunches”), 440,000 MWh of energy is needed to pump enough water to achieve the 350,000 MWh output from one 7 day period. This power will come from “the grid”. The hope is that it will be from “large scale renewables”.

Currently Australia’s installed capacity of wind power – the only large scale renewable resource – is 4,400 MW.  On average, they operate at 30 to 35% of installed capacity so averaged over a year the actual capacity is 1,540 MW, (4,400X0.35).

To pump the water needed for the 350,000 MWh output needs the total Australian capacity of wind power for 12 days. That is 12 days without them putting any energy into the grid for ordinary consumers. At midday on 28 August 2017, (when I wrote the initial article), the combined wind power resources of Australia were producing at 150 MW. At that output the pumping time to “fill” the system is 122 days.

The scheme can then deliver 350,000 MWh over 7 days, (50,000 MWh per day). At midday on 28 August 2017 the total grid load was 24,000 MW so in 2 hours the grid consumed 48,000 MWh or 96% of a “Snowy 2.0” day.

Considering the best case scenario, the time to “fill” is 12 days and the time to “empty” is 7 days giving a “fill/empty” cycle of 19 days. That is 19 cycles per year.

Each cycle requires 437,000 MWh to fill and yields 350,000 MWh when that water is passed through the turbines. The annual power deficit is 1,653,000 MWh. The simplistic view is that this electricity will be sourced when renewable production exceeds demand. That sounds good until you consider the sporadic operation of wind farms. To think that there will be some “spare” electricity when it is needed is courageous at best and stupid at worst.

Of course the renewable energy used for pumping will attract the RET subsidy and the electricity produced will do so as well.

Assuming that the unit cost of power in is equal to the unit cost of power out, and using a plug figure of $150 per MWh as a power cost the operating cost per year is $247,950,000.00 which equals $37.00 per MWh.

The project was originally “costed” at $2 billion but has now become $4 billion. The federal government will now outlay a further $6 billion to buy back the NSW and Victorian interests in “Snowy 1.0” giving a total of $10 billion all of which will be funded one way or the other by power consumers.

Using some simplistic loan repayments at 5% simple per year, the interest on the $10 billion is $500,000,000.00 per year. This gives an annual “financing” cost of $75.00 per MWh so the combined annual costs of operating and financing are around $112.00 per MWh.

Snowy 2.0 is not a “new generator”; it is a nett user of power and it will cost around $112.00 per MWh to produce electricity. This will be passed on to consumers in the time honoured fashion and it will garner RET subsidies along the way. It relies on intermittent power sources to fill the dam and history shows that there are many times when the performance of wind generators is abysmal to say the least. Pumped hydro was originally designed to make use of spare capacity from large, reliable and dispatchable thermal generators when demand was low. I wonder why our “leaders” do not understand that they just look stupid promoting these ridiculous ideas.


Originally published in Catallaxy Files. Wednesday 14 March 2018.


One Comment

  1. I always thought this whole thing was a “brain fart” by Malcolm Turnbull and now I am sure of it! This country is sorely in need of considered policy making on a whole range of issues – not the least of which is energy.

    Both sides of politics are to blame for this as are the main stream media (MSM) who, with one or two honourable exceptions, seem to have the attention span of an inebriated gnat and can’t go past ‘gotcha’ moments these days.

    Yes, I know social media and the ever changing news cycle has more than a bit to do with this but it is a depressing picture. Yet when someone does come up with genuinely thought-through policies the usual rent seeking “whats in it for me/woe is me’s” wail, bitch and moan to the MSM who then do a ‘rinse and repeat’ exercise.

    The result is ill-considered, poorly thought through and executed, expensive, sound bight rubbish like Snowy 2.0.

    An interesting story nevertheless.

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