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.
