News

HUNTER POWER PROJECT UPDATE

16/12/2024

Testing and commissioning of Snowy Hydro’s fourth fast-start, on demand gas power station has now begun.

This first phase of commissioning involves pressure testing the Hunter Power Project’s (HPP) approximately 23 kilometre network of pipe infrastructure that will deliver gas, diesel and water to the station’s generators.

Using the latest technology the world’s best manufacturers can offer, HPP will be powered by two of the most gas-efficient turbines available and will be capable of delivering 660 megawatts of electricity to the grid. This significant amount of power will make a meaningful difference to supply reliability, helping the network cope during hot weather and outages of transmission lines and other power stations.

As more wind and solar enters the electricity grid, HPP will play a critical role by providing back-up power to homes and businesses.This means that while HPP is only expected to run around 5 percent of the time, it will enable around 2 gigawatts of renewable energy to be added to the grid, which is the equivalent of displacing around 5 million tonnes of CO2-e every year¹.

PHASED COMMISSIONING

Alongside the pipe pressure tests, HPP’s switching station, which was built by Snowy Hydro as part of the project but handed over to Ausgrid to operate, will be connected to provide the power station with energy from the grid. Testing will then progress to commissioning the first of HPP’s two turbines and generators.

Pending a smooth process, the first turbine and generator is expected to reach full commercial operation by the end of April 2025. Commissioning of the second turbine and generator will follow, with commercial operation of both turbines and generators expected by the end of June 2025.

Depending on commissioning outcomes, there is a possibility of either turbine being available to provide some power to the grid sooner. These target dates are dependent on the commissioning program not being impacted by weather or other factors.

VALUE AND COST

HPP has experienced extended periods of extreme weather and other factors that have stopped work on the project, impacting its timeline. As flagged in the August 2024 project update, HPP’s cost has been impacted in order to minimise the delay in its completion, so HPP can produce power for the network as soon as possible.

Prioritising power availability means the final cost of HPP is expected to be around $1.3 billion, dependent on a smooth transition to commercial operation without delays from weather or other factors.

Despite the change in cost, the strength of HPP’s economic benefit has increased. HPP’s net present value (NPV), has increased to $914 million from $531 million at the March 2021 final investment decision².

This increase in HPP’s economic value has been largely driven by:

more wind and solar generation in the grid increasing the need for HPP to provide on-demand, back-up energy to boost electricity reliability;
a substantial increase in HPP’s gas storage capacity to 70TJ from 43TJ;
HPP’s contribution to managing transmission risk between Sydney and the Snowy Hydroelectric Scheme in the Snowy Mountains, by providing an alternative electricity source for Australia’s largest economy in the event of transmission outages.

LOCAL BENEFITS

The project is delivering substantial jobs and investment benefits to the Hunter region:

To promote interest in STEM career paths and education, HPP’s team has engaged with local students through career expos and presentations, including through partnerships with the Clontarf Foundation in Kurri Kurri, Youth Express and Training Services NSW.

$751 million spent domestically, with $619 million spent in the local Hunter region.

57% of HPP’s workforce are local residents.

20 apprentices are engaged on the project, providing skill development in the Hunter region.

Over $175,000 has been awarded to 39 local projects through the HPP Community Grants Program.

Over $26,000 has been granted to Cessnock LGA schools through the Snowy Hydro Local Schools STEM Fund in 2024.

¹Assumes every 1 MW of dispatchable capacity from HPP enables 3 MW of variable renewable capacity and displaces thermal generation with a carbon intensity of 0.94 t/CO2-e/MWh. Scope 1 emissions from HPP are estimated to be approximately 0.14 million tonnes of CO2-e per annum based on a carbon intensity of 0.52 t/CO2-e/MWh.

²NPVs discounted to March 2021.

News

HUNTER POWER PROJECT – PLANNING MODIFICATION AMENDMENT

03/10/2024

Hunter Power Project (HPP) is set to begin operations in December 2024 with one generator running on diesel during the testing and commissioning phase.

The second unit and gas introduction will follow shortly, with full operations expected within a few months.

While the project’s planning modification has proposed increasing diesel operating hours to 1,100 per unit for 2025, Snowy Hydro does not currently expect HPP to operate entirely on diesel in 2025. The purpose of the modification is to provide for the current anticipated completion of the gas pipeline to March 2025 plus appropriate program contingency to ensure the power station can still generate energy in the event of any further delays to the gas pipeline or to the project’s commissioning program.

HPP’s gas pipeline is being delivered by APA Group and is independent of Snowy Hydro’s delivery of the power station.

Snowy Hydro has updated some of the information submitted to the NSW Department of Planning, Housing and Infrastructure. Previously some of the information was inaccurate and did not accurately reflect our intentions around contingency planning being one of the drivers of the modification.

Once fully operational, HPP will primarily run on gas, using diesel as backup. Gas remains crucial for meeting peak demand and supporting Australia’s renewable energy transition.

News

HUNTER POWER PROJECT DELIVERS LOCAL JOBS AND SKILLS

12/08/2024

Snowy Hydro’s Hunter Power Project (HPP) is leaving a lasting impact on the local workforce, delivering approximately 600 direct construction jobs and crucial skills development for a number of high-demand construction trades.

More than 60% of HPP workers live locally, which is part of Snowy Hydro’s commitment to supporting communities that the company is a part of.

The number of apprentices at HPP is on the increase, with Snowy Hydro working alongside principal contractor UGL to provide an additional 12 apprenticeship positions in June 2024, which includes three females and two First Nations apprentices. New apprentices on site include a boilermaker, nine electricians, and two mechanical fitters.

Snowy Hydro CEO Dennis Barnes said HPP will be good for jobs long after construction is complete.

“We are proud of our contribution to the construction, engineering, and infrastructure sector here in the Hunter, especially given the current tradespeople shortages in Australia.

“This project will have a lasting impact on the size and proficiency of the local workforce”

Mr Barnes said.

”A job on HPP will help set our team up for a rewarding career and a bright future.”

Electrical apprentice Daniel Battle said he became interested in the electrical trade after working as a Trades Assistant on the project.

“This apprenticeship is giving me the necessary skills, knowledge, and experience while working to a high standard within the industry to become an electrician,” Mr Battle said.

Apprentice boilermaker Jackson Scott said he was passionate about fabrication and welding. “I was very lucky to be offered an apprenticeship shortly after starting at HPP.

“HPP is preparing me to have a successful career contributing to important infrastructure in our country, and I’m extremely grateful,” Mr Scott said.

Electrical apprentice Camilla Lindeberg said she worked as a cleaner for seven months before applying for an apprenticeship.

“I never thought of being an electrical apprentice until the opportunity presented itself, and I’m excited for what the future holds.

“The challenge of learning something new and directly contributing to building HPP gives me a great sense of achievement and sets me up for a whole new career with endless opportunities,” Ms Lindeberg said.

Snowy Hydro is also looking to the future workforce through its community support programme.

In 2024, Snowy Hydro extended its Local School STEM Fund to the Cessnock LGA where HPP is located. More than $26,000 was awarded to schools in the area to foster learning opportunities and career pathways for local young people with a focus on STEM.

From left to right: Daniel Battle, Camilla Lindeberg, and Jackson Scott.

News

SECURING THE FUTURE OF CRITICAL ENERGY TRANSFORMATION PROJECTS

31/08/2023

Snowy Hydro today announced the outcomes of its major projects resets, for Snowy 2.0 and the Hunter Power Project.

Snowy 2.0

Revised total cost to complete is $12 billion. At the end of June 2023, expenditure on the project was $4.3 billion, with 80% of these funds reinvested in the Australian economy.
First power to be delivered in the second half of 2027 and a target date for commercial operation of all units of December 2028.
The fixed-price EPC Contract was executed by Snowy Hydro and Future Generation Joint Venture (FGJV) following Final Investment Decision in a relatively benign and supportive environment. The EPC Contract is no longer fit for purpose.
Snowy Hydro and FGJV are finalising an amendment to the existing EPC Contract to move to an incentivised target cost contract model. Snowy Hydro will also settle all outstanding claims with FGJV.
Delivery of an additional 200 MW or 10% capacity; bringing total capacity to 2,200 MW.
Snowy 2.0 is the largest renewable energy project under construction in Australia and will provide crucial deep storage central to Australia’s renewable transition.
The value of Snowy 2.0 to the national electricity market has increased materially since the Final Investment Decision in December 2018.
Snowy 2.0 will provide 350,000 MWh of energy storage for 150 years.
Snowy 2.0 remains value accretive, with the Company currently projecting a NPV of approximately $3 billion (based on a $12 billion revised target total cost and December 2028 delivery).
Snowy Hydro is working closely with its Shareholder to develop an appropriate capital structure for the Company to support the increase in costs and to maintain the Company’s target credit rating of BBB+.

HPP

The total target cost is now $950 million and will be funded by Snowy Hydro.
The project delivery remains December 2024.
The project remains economically viable on a forward looking basis with the value of its firming capacity clearly demonstrated in the May/June 2022 energy crisis.

Snowy Hydro CEO Dennis Barnes said the project resets will enable the commercially sustainable and successful delivery of both projects.

“I am committed to ensuring these critically important projects are transparent and are placed on a robust and sustainable footing. Moving to an incentivised target model with FGJV will result in closer collaboration, stronger oversight and alignment of interests between Snowy Hydro and FGJV. ” Mr Barnes said.

“Snowy 2.0 is being engineered to deliver clean and reliable storage and electricity generation for Australians for the next 150 years. It is a truly transformative national project that is generating jobs and significant investment in regional areas; it will deliver benefits immediately following its completion and will continue to do so for many future generations of Australians.

“Snowy 2.0 involves billions of dollars of investment, with approximately 80% going into Australian jobs, goods, services and skills. We are building the skills of local workers that can later be used elsewhere to assist in Australia’s ongoing energy transition.”

“The Hunter Power Project is an important project in Australia’s energy transition, enabling the roll-out of wind and solar projects by firming these intermittent generation sources into reliable power,” Mr Barnes concluded.

Fact sheet

Webuild Clough media statement

Background Information

Snowy Hydro today detailed the outcome of the review and reset process for key electricity projects, Snowy 2.0 and the Hunter Power Project.

Snowy 2.0

The estimated total cost for Snowy 2.0 project delivery has been revised to $12 billion, with expenditure on the project to date of $4.3 billion. The terms of the contract with Future Generation Joint Venture (FGJV) are being finalised to move to an Incentivised Target Cost contract model, which will result in closer collaboration, stronger oversight and alignment of interests between Snowy Hydro and FGJV. Snowy will also settle all outstanding claims with FGJV.

The target date for commercial operation of all units is December 2028 with first power to be delivered in the second half of 2027.

Through the project reset process Snowy Hydro has worked with FGJV and hydro technology contractor Voith Hydro to increase the capacity of the power station by 10%. Snowy 2.0 will now deliver dispatchable generation capacity of 2,200 MW, as well as providing energy storage of 350,000 MWh (or 160 hours of generation at maximum output).

The cost revision reflects the compound effect of extraordinary factors. The external factors have impacted major projects around Australia and globally, in particular:

The major disruption caused by the Covid-19 pandemic;
Delayed ability to mobilise, given critical shortages of skilled labour, exacerbated by quarantine and movement restrictions;
Extended and ongoing disruption to global shipping and supply chains caused by the pandemic, conflict and natural disasters, delaying access to key materials;
Significant inflation in costs of key construction materials and inputs; and
Significant inflation in labour costs.

In addition to the external factors, the project has been impacted by:

Design immaturity at final investment decision, with a number of design elements requiring more time to complete due to their technically complex nature. The final design now being more expensive to construct; and
The impact of variable site and geological conditions, with the most impactful being the soft ground encountered that is delaying tunnel boring machine (TBM) Florence’s progress at Tantangara.

Despite the challenges outlined above, the project remains economic. Strong and growing market demand for dispatchable electricity is expected to underpin demand for the services provided by the project well into the future.

Construction of Snowy 2.0 is now approximately 40% complete and solid progress continues to be made, including:

Excavation of the main access and emergency cable and ventilation tunnels is now complete – approximately 6km of tunnelling;
Excavation on the 6km tailrace tunnel has commenced and tunnelling on the 1.45km inclined pressure shaft will commence shortly;
Work on the underground power station is now underway with access available from both ends and excavation and support of cavern crowns underway;
Excavation at the Talbingo intake (where water will enter during pumping and exit during generation) is halfway complete, with 310,000m³ of earth excavated, while the first stage of earthworks at the Tantangara intake are complete, involving the movement of 205,000m³ of earth; and
Manufacturing of the six pump turbines has commenced, the first major mechanical component has been shipped and has been transported to site.

Meanwhile, excavation of the headrace tunnel by TBM Florence is now ready to be continued, subject to the receipt of necessary regulatory approvals.

The project currently has a team of approximately 2,700 Australians dedicated to its safe and efficient delivery. An additional 1,500 jobs are forecast over the project’s lifespan.

Hunter Power Project

The Hunter Power Project has experienced similar challenges to Snowy 2.0 and following a comprehensive review the expected cost is now $950 million. Despite the increased cost the Hunter Power Project remains economic.

Construction continues to progress on schedule, with about 460 people working on the project, which remains on track to be delivered by December 2024.

News

MAJOR MILESTONE REACHED FOR HUNTER POWER PROJECT

19/06/2023

The second of two generator stators that will power Snowy Hydro’s Hunter Power Project has arrived onsite at Kurri Kurri after its journey from the Port of Newcastle late last night.

The 150-metre-long convoy containing the 314-tonne generator stator left the Port of Newcastle at 9pm on Saturday evening and arrived at the Kurri Kurri site at 2am on Sunday, where it was unloaded and positioned for installation.

The convoy included six prime movers, four police escort vehicles and four pilot vehicles.

The first generator was transported two weeks ago and travelled the same route to Kurri Kurri from the Mayfield berth, via Industrial Drive, Maitland Road, Newcastle Inner City Bypass and the Hunter Expressway.

The two generator stators were prepared for transportation at the port over a period of two days after arriving from Japan late last year and earlier this year. When installed, the generators will spin from the power of the two open cycle gas turbines (OCGTs), which in turn will generate the 660 megawatts of electricity the Hunter Power Project is delivering for the National Electricity Market.

Snowy Hydro CEO Dennis Barnes said this project milestone was the result of months of meticulous planning from the Hunter Power Project team.

“Moving these two large components of the power station to our construction site required many months of work and liaison with the Port of Newcastle, the team at Mitsubishi in Japan, and local engineered transportation company Rex Andrews.

“Investment in dispatchable generators like the Hunter Power Project is vitally important as Australia transitions to renewable energy, which will ultimately benefit the environment and future generations,” Mr Barnes said.

The Hunter Power Project is expected to be operational by 2024.

News

SNOWY HYDRO AND APA SIGN TRANSPORT, STORAGE AND DEVELOPMENT AGREEMENTS FOR THE HUNTER POWER PROJECT

20/06/2022

Snowy Hydro today welcomed the announcement by APA Group that it had signed gas transport, storage and development agreements for the Hunter Power Project.

APA will construct, own and operate the Hunter Power Project’s gas pipeline connection to the Sydney -Newcastle pipeline, known as the Kurri Kurri Lateral, along with a 70 terajoule gas storage facility.

Snowy Hydro CEO Paul Broad said the Hunter Power Project would play a critical role in supplementing Snowy’s generation portfolio with dispatchable capacity when the needs of electricity consumers are highest.

“Along with Snowy 2.0, which is Australia’s largest committed renewable energy project, the Hunter Power Project will underpin thousands of megawatts of new wind and solar plants.

“The Hunter Power Project will be good for prices, by filling the gap in electricity demand and offsetting potential cost increases resulting from the closure of the Liddell Power Station.

“Today’s announcement is another significant milestone for the project and Snowy is looking forward to continuing to work closely with APA.

“The Hunter Power Project is on track and progressing well, with key milestones including naming CIMIC Group’s UGL as the Principal Contractor, as well as the signing of a major contract with Mitsubishi Power to deliver the hydrogen-ready open-cycle gas turbines.

“Snowy continues to take opportunities to turbo-charge local investment by the project. That’s why we’ve engaged a Hunter-based recruitment agency, engaged a local civil works contractor, established a Snowy Hydro site office at Kurri Kurri and mobilised a local workforce.”