The Turnbull Government has taken full ownership of Snowy Hydro Limited in a deal that paves the way for the Snowy 2.0 project to proceed to a final investment decision by the independent Snowy board.
Prime Minister Malcolm Turnbull, Energy Minister Josh Frydenberg and Finance Minister Mathias Cormann released a joint statement announcing the agreement this week.
“The historic agreement is part of our plan for a stronger economy,” the statement said.
“It will help generate more affordable, reliable electricity, and create new jobs.
“The deal will also fund congestion-busting infrastructure, with more than $6 billion in Commonwealth funds flowing to New South Wales and Victoria for productive infrastructure investments.”
Snowy Hydro will continue to operate as an independent commercial company and the infrastructure will remain in public ownership.
“Snowy Hydro is a critical player within the National Electricity Market (NEM),” the statement said.
“The company owns and operates 5500MW of generation capacity including the iconic Snowy Mountains Scheme.”
Snowy 2.0 is a proposed expansion of the Snowy Mountains Scheme and will provide an additional generation capacity of 2000MW, enough to power the equivalent of 500,000 homes at peak demand.
The project will help make renewables reliable, reduce volatility in energy markets and provide other services critical to the security of the NEM.
Earlier this year, the Snowy 2.0 feasibility study found:
- the project is technically feasible – it can be built and Snowy Hydro have a base-case design and detailed construction schedule;
- the project is financially feasible as it meets Snowy Hydro’s stringent investment hurdles; and
- Snowy Hydro can finance the project itself using retained earnings and borrowing.
The Snowy Hydro Board is expected to make a final investment decision on the Snowy 2.0 project later this year.