Experts have signed an open letter stating that the Snowy 2.0 hydro electric project represents nothing more than a $10 billion white whale,” urging the PM and State Premier to be wary of bulging costs while calling for a review of the project.
A group of 37 environmental, economic, engineering and energy experts have signed an open letter to both the state and country leaders calling for a review into the snowy river hydroelectric project after costs have blown out in recent months.
Earlier this year, the same group said that state and federal governments were making “overstated and false claims” regarding the project, suggesting that construction costs could blow out to $10 billion; double the original cost estimate.
“Cut the losses – there is still $9 billion or more to be saved on behalf of the Australian taxpayers”
The group says that off the back of recently published statistics from the Australian Energy Market Operator (AEMO), the Snowy 2.0 hydro project remains an “inefficient, unnecessary and damaging project,” despite claims from the government.
The letter reads that “it is now even more clear that there are numerous alternatives that are lower cost, more efficient, quicker to construct, and incur less emissions and environmental impacts.”
The group says that according to the AEMO’s figures, the Snowy 2.0 project will fail to pay for itself even in the long-term future, and is not necessarily the best renewable energy option. Authors of the letter state that demand for the project won’t reach feasible levels until 2030, where competitive technologies like battery storage may well make the Snowy 2.0 technologically redundant.
Authors of the letter state that in relation to costs, “the business case estimate of $3.8 – $4.5 billion is understated, also by around 100%. It has been disclosed that the estimate does not include all project costs, and has already been exceeded by a $5.1 billion contract for just a portion of the works.”
In their letter, the authors stated that taking into account the AEMO’s latest projections for the costs associated with both hydroelectric and battery storage, the project is increasingly at risk of never becoming profitable.
The AEMO says that its latest modeling shows a predicted 50% increase in the costs associated with hydroelectric power generation, while battery costs will simultaneously drop by anywhere between 30-40%.
Battery costs are expected to drop once again before 2030 by 50%.
According to the latest August dataset from the Victorian Energy Policy Centre, revenue for the Snowy 2.0 project is set to cover just 25% of its build cost.
“Once all costs are added, including the associated transmission lines, we predict the total to be in the vicinity of $10 billion… not only has output been overestimated by 100%, Snowy 2.0 is not urgent, nor critical for the transition to renewable energy, nor ‘renewable’.”
“That Snowy 2.0 should neer have been approved and, if constructed, will be a $10 billion White Elephant,” the letter continued to explain, urging the government to “cut the losses – there is still $9 billion or more to be saved on behalf of the Australian taxpayers and electricity consumers.”
“We again urge your Governments to undertake an independent expert review of Snowy 2.0. Recent information confirms that Snowy 2.0 is not critical, not viable, uncompetitive, wasteful and will devastate vast areas of Kosciuszko National Park… There are far better alternatives.”