News

Snowy Hydro and SMEC reunite for Snowy 2.0

11/05/2017

Snowy Hydro Limited and the Snowy Mountains Engineering Corporation Australia (SMEC) will join forces once again, this time to carry out the feasibility study into the potential expansion of the Snowy Scheme’s pumped hydro storage capability.

Snowy Hydro and SMEC have a long association and worked together from the earliest days to develop the iconic 4,100 megawatt (MW) Snowy Mountains Hydro-Electric Scheme under the auspices of the Snowy Mountains Hydro-Electric Authority, established in 1949.

Selected through a tender competitive process which attracted interest from a field of world-class engineering firms, SMEC has now been appointed as the lead consultant engineer for the feasibility study into the first major expansion of the Scheme since construction days.

Snowy Hydro CEO Paul Broad said “SMEC was the obvious choice to partner with us on the study, given we share the same DNA. It really is a case of getting the band back together. The task now will be to bring together our best and brightest to revisit some of the visionary proposals developed over many years by the talented men and women who built the Scheme.”

The feasibility study will first review existing proposals to expand pumped hydro storage on the Snowy Scheme, many of which have existed since the 1960s. Under the most prospective proposal, up to 2,000 MW of hydro-electric energy could be added to the grid to act as rapid response back-up during periods of high demand and fill the gaps in energy supply caused by the growth in intermittent renewables and the exit of thermal baseload power.

The pumped hydro capability means the water utilised for electricity generation can be recycled to provide supply when it’s needed most, with no impact on the Scheme’s ability to continue to supply valuable water to irrigators in the food bowl of south-eastern Australia.

“This project has the potential to deliver one of the largest pumped hydro schemes in the world and underscores the importance of the Scheme’s existing role as the battery of the National Electricity Market.”

“While it has long been an Australian engineering icon, the importance of the Snowy Scheme’s role as the battery storage of the NEM will only become more critical as we move to a low carbon economy. The reliable, fast-start Scheme can help to responsibly manage the exit of baseload thermal power and the rise of intermittent renewables.

“As we move through the feasibility study phase, we will gain greater clarity around the technical and engineering requirements for the expansion as well as costs and timeframes for its construction”, Mr Broad said.

SMEC CEO Andy Goodwin said “Snowy Mountains are part of our namesake and the backbone of our heritage, so the chance to be involved in this project again is a unique ‘twice-in-a-lifetime’ opportunity, both for our organisation and those engineers who worked on the original scheme.

The Snowy 2.0 project will provide us with new design challenges from its predecessor and we’ve created a team of our most experienced specialists to deliver the feasibility stage.

We’re honoured to be part of the project and looking forward to resuming our presence within the Cooma community again.”

SMEC’s appointment will deliver significant benefits to the local Snowy Mountains community. As part of its commitment to this project, SMEC will reopen its previous offices in Cooma, which will see more than 30 staff permanently based in the town.

News

Expanding Pumped Hydro Storage

15/03/2017

The iconic Snowy Scheme’s role as the battery of the National Electricity Market (NEM) could be supercharged as part of plans to expand the pumped hydro storage capability within the Scheme.
Snowy Hydro, working with the Australian Renewable Energy Agency (ARENA), will shortly commence a feasibility study into several sites across the Scheme which could support new large-scale, pumped hydro-electric energy storage.

The proposal could add up to 2000 megawatts of new renewable energy to the NEM and act as rapid response back-up to fill the gaps in energy supply caused by intermittent renewables and generator outages.

The pumped hydro capability means the water utilised for electricity generation can be recycled to give continuous supply when it’s needed most, with no impact on the Scheme’s ability to continue to supply valuable water to irrigators in the food bowl of Australia.

Snowy Hydro Managing Director and CEO, Paul Broad, said the proposal has the potential to deliver an innovative clean-energy solution to the critical security and supply issues in the NEM, helping to take the pressure off power prices for consumers and businesses, while reducing emissions.

“From our earliest days, Snowy Hydro has been moving water to support the irrigators in the food bowl of Australia and generating electricity during peak demands to keep the lights on in the NEM,” Mr Broad, said.

“The creators of the Scheme foresaw a time when its capabilities may need to be expanded and, as a result, there are very real options in-built in the Scheme’s design to extract more value to the community.

“At a time when the security and stability of the NEM, energy affordability and emissions reduction are under scrutiny, there is an opportunity to leverage the iconic Snowy Scheme to once again deliver an energy solution for the country.

“By supercharging the utilisation of the Snowy Scheme’s storage, we can help the NEM best cope with peak demand through new supply at a time when baseload energy is exiting the market and renewables with intermittent generation are not providing the reliable capacity needed by Australian businesses and consumers.

“While the feasibility study is the first step, this project could once again bring together the world’s best and brightest engineers and technicians to enhance a national icon.”

The Scheme itself already operates as the ‘battery storage’ of the NEM, utilising dams to store energy in the form of water that can be delivered to the grid within minutes through the fast start capabilities of the Scheme’s nine power stations.

There are a number of sites across the Scheme capable of supercharging Snowy Hydro’s storage capability – providing additional generation capacity, helping the security and stability of the NEM, and with pumping capability to maximise the water resources and existing dam storage in the Scheme. The most prospective project could increase the capacity of the 4100 megawatt Snowy Scheme by 50 per cent and result in a power station at least as powerful as Snowy Hydro’s 1800 megawatt Tumut 3 Power Station, which already includes pumped hydro capability.

The feasibility study will explore the physical, technical and environmental requirements for expansion of pumped hydro at sites across the Scheme, the potential output of new pumped hydro facilities and the costs associated with each project.

The Australian Government, through ARENA, is negotiating grant funding to support the Snowy Hydro feasibility work as part of ARENA’s ongoing efforts to accelerate Australia’s shift to renewable energy.

ARENA CEO Ivor Frischknecht said expanding the Snowy Scheme could help to deliver ARENA’s goal of ensuring a smooth transition to a renewable energy future.

“Australia’s energy system is rapidly evolving and ARENA is funding solutions like pumped hydro storage that provide consumers with more affordable and reliable renewable energy,” Mr Frischknecht said.

“Pumped hydro is economically viable right now and supports our grids by providing long term energy storage capacity that’s available on demand.”

News

SA Solar Investment

01/02/2017

Snowy Hydro Limited will invest in a battery ready 100 megawatt solar facility in Tailem Bend in South Australia to boost its generation capacity and grow its electricity retail business – Lumo Energy.

By entering into a long-term agreement with experienced renewable energy investor and developer Equis, Snowy Hydro will be able to access 100 megawatts of renewable solar generation on completion of the solar farm in 2018, with the ability to install up to 100 megawatts of large-scale battery storage on the Tailem Bend site.

“This is an exciting opportunity for Snowy Hydro to source renewable generation in South Australia to complement our existing capacity,” Snowy Hydro CEO and Managing Director Paul Broad said.

“The solar farm represents a significant, strategic investment in South Australia by Snowy Hydro and demonstrates our commitment to growing both our generation business and our Lumo Energy business, which services around 50,000 electricity customers in the State.

“We are pleased to be working with Equis to deliver more renewable energy to South Australia, backed by reliable fast-start thermal capacity. Importantly, this unique generation facility at Tailem Bend is also ‘battery ready’ with the ability to install up to 100 megawatts of large-scale battery storage on the site.”

David Russell, CEO of Equis, said: “As Asia’s largest renewable energy developer and investor, the Tailem Bend solar project represents an exciting expansion into Australia for Equis and an unique opportunity to leverage our development and construction expertise to deliver large scale, reliable renewable energy for Australian consumers.

“We are delighted to partner Snowy Hydro on the Tailem Bend solar project to build one of Australia’s lowest cost solar generation projects with a unique “battery-storage ready” design, further enhancing the project’s long term attractiveness as a stable, low cost source of power.”

Snowy Hydro currently owns and operates 5500 megawatts of generation capacity across Australia, including the iconic 4100 megawatt Snowy Hydro-electric Scheme in the Snowy Mountains region of NSW.

The Tailem Bend project will mean Snowy Hydro has access to 264 megawatts of generation capacity in South Australia. The company already operates 136 megawatts of thermal capacity at Port Stanvac and Angaston and will add a further 28 megawatts of diesel generation at the Tailem Bend site from 2017.

“We combine the power of the mighty Snowy Scheme with gas and diesel fired peaking generators to deliver a flexible and reliable mix of energy to our growing customer base every day,” Mr Broad said.

“We have been keeping the lights on in NSW and Victoria since construction days in the 1950s and are one of the most experienced and diverse companies operating in the National Electricity Market.

“Through our award winning retail companies – Red Energy and Lumo Energy – Snowy Hydro services more than one million gas and electricity customer accounts. We pride ourselves on superior customer service and look forward to growing our Lumo Energy retail customer base in South Australia.”

News

Keeping the lights on

22/12/2016

CEO, Paul Broad, weighs in on the recent blackouts in South Australia and the implications for the National Electricity Market…

Australia has been blessed with relatively cheap energy and we have grown as a nation as a result of it. A key part of that growth has been having enormous renewable resources such as Snowy and Hydro Tasmania, which have played an integral part in keeping the lights on with our reliable, fast-start responsiveness to the market. Equally so, in Snowy’s case, we provide more than 32 per cent of all renewable energy that is produced in this country. This clean, efficient and renewable energy continues to help light up homes and businesses in the Eastern states including South Australia and Tasmania.

The Snowy Scheme was visionary in its day and is an important part of our nation’s history. It was an amazing engineering success to make true the vision to collect and move water east to west and into the growing food bowl of Australia and to pay for it through electricity generation. This is still the vision we have today, but we have evolved over the years through innovation and diversification, and have gone beyond what our founding fathers had envisaged.

The modern Snowy Hydro operates a complex, integrated end to end energy business, which we are immensely proud of.

We continue to be the proud custodians of water that is collectively owned by the people of NSW and Victoria, and manage it under a strict Water Licence regime. Water in the Scheme plays a critical role as it not only underwrites the production of agricultural products worth around $3 billion each year, but through the Water Licence it also assists with counteracting the effects of severe droughts and improving productivity in the Murray Darling Basin. We are the leading provider of peak, renewable energy in the country. We also provide price risk management products for wholesale customers in the NEM and through Red Energy and Lumo, we deliver electricity and gas to homes and businesses. Finally, our ability to utilise the Scheme’s large, reliable, flexible and fast-start capability to our advantage also means that we play a critical role in keeping the lights on and are best placed to provide black start capability. It is disappointing that some regulators do not see it that way, given we are not currently part of AEMO’s contracted black-start arrangements, despite previously providing the service for many years and dedicating resources to respond quickly and safely.

On the recent statewide blackout in South Australia, I cannot help but reflect that if South Australia was fully interconnected with NSW, then the lights would have never gone out. The NEM has delivered very robust and efficient outcomes and, if left to its own devices, can deliver affordable energy to consumers drawing on the most efficient and effective means of generation to meet demand. But regulatory intervention and second best policy choices can often create problems, as they are now, by creating distortions in the market for which end-users ultimately pay the price. This is not the time to be picking winners or imposing solutions, but rather a time to trust the market to do what it does best. A more sensible approach could ensure we maintain a secure, reliable, affordable energy system while at the same time reducing emissions through a market based mechanism.

At Snowy we recognised that the uncertainty put into the NEM by knee-jerk reactions will be a challenge for the future and that Snowy will play integral role in filling in the gaps when the wind is not blowing and the sun is not shining, particularly in NSW. In the wake of South Australia, we are urging governments and regulators to ensure that there are proven, reliable ‘black-start’ arrangements in place across the country to both keep the lights on and to ensure they are turned back on quickly in the event that things go wrong.

Snowy has always played a critical role in keeping the lights on, from our earliest days. Our contribution to the nation since construction began in 1949 was formally recognised in October when the Commonwealth Government added the Snowy Scheme to the National Heritage List. The addition to the National Heritage List is recognition of our important place in Australia’s history and the contribution we have made to the social and economic fabric of the country. It’s an important nod to our past and helps new generations to appreciate the sacrifice and skill of the many thousands of Australians and new arrivals who helped build the Snowy Scheme. Importantly, the listing does not impact on our important operations nor on our ability to operate, modernise and upgrade the Scheme for the benefit of future generations.

As 2016 draws to a close, at Snowy Hydro we have had another successful year across both our retail and generation businesses. This time last year we were reflecting on the contribution made by the expansion of our retail energy business (with the acquisition of Lumo and Direct Connect) and the addition of the gas fired power station at Colongra to our generation portfolio. Those acquisitions (in late 2014 and early 2015) have paid off through their contribution to our financial performance and management of our exposure to transmission risk, should our Snowy Scheme assets become constrained if lines went down into Sydney or Victoria. 2016 has also been about consolidation and growth. For the first time in the company’s history we made more than $2 billion in revenue, we recorded more than $500 million pre-tax profit and hit the significant milestone of more than one million retail customers.

Finally, as always, I would like to thank you for your support for Snowy Hydro this year. We look forward to sharing more news about our business in 2017. On behalf of everyone who works for Snowy Hydro, I wish you a safe, prosperous and happy festive season.

News

Experiencing wet conditions

07/09/2016

What a difference a couple of months make! Earlier in the year we were preparing for drier conditions off the back of El Nino but, as our Snowy Hydro climate scientists predicted last edition, we are now experiencing decidedly wetter conditions. With only four months of the water year passed, we have already received well over half of our annual inflows and the snowpack hasn’t started to melt yet. Already we have seen some high inflow events in July which affected landholders around the Murray; and NSW water authorities are carefully watching the Murrumbidgee side to manage any water issues that could arise there.

Snowy Hydro is working with local emergency services and property owners to ensure the lines of communication are open and we update people regularly on the conditions we are experiencing on the waterways across our operations. As the snow melts and inflows into the Scheme increase, it’s important local communities and landholders are kept abreast of any major movements of water. We will continue to work with local authorities and communities in the coming months to carefully manage any water events as they arise.

On a pleasing note, Snowy Hydro has ended the 2015/16 financial year in a strong position. This is the first full year that our recent acquisitions – our gas power station in Colongra and diesel assets in South Australia, as well as Lumo Energy and Direct Connect – have contributed to our financial results.

We hit some significant milestones as a business this year – exceeding more than $2 billion in revenue and passing the one million retail customer mark – a position we have sustained and continue to grow. Our retail businesses – Red Energy, Lumo Energy and Direct Connect – are all working together to attract and retain customers, focusing on superior customer service and industry leading customer satisfaction scores. We have more than 1200 staff working in our retail businesses in Melbourne and we are working to bring them all together under one roof by next year.

Our generation business has also had a strong year. Generation levels have increased as market and operational conditions improved. We are focused on improving the performance of our assets across the fleet and are currently working on a major upgrade of one of the units at Murray 1 in Khancoban, meaning more Snowy Hydro workers will be located in and around that region over the coming months.

We would love to grow support for Red Energy in the Snowy Mountains and, as such, we have been sponsoring local events and festivals and we’re once again sponsoring the ski season this Winter. As a local company with such a long and proud history in the Snowy Mountains, we want to ensure that the communities we live and work in can get the benefit of being our customers, with energy backed by the mighty Snowy Scheme. Our field sales teams have been out and about in the Cooma and Tumut regions over the last few months and will continue to encourage households and businesses to get on board with Red.

Shortly we will be conducting our biennial community research so you may receive a phone call asking you to spend some time talking about Snowy Hydro, how we communicate with you and your understanding of our business and its challenges. If you are approached, we would greatly appreciate you spending the time to give us your thoughts. It’s all confidential and anonymous, of course. It will help us to ensure we are doing the right things to keep you informed about our business. In the meantime, stay safe and dry!

News

Winter is on its way

24/06/2016

Winter is almost upon us and that means the Snowy Mountains region is gearing up for the peak tourism season where tens of thousands of visitors come to the region to enjoy the snow, as well as the hospitality and scenery that locals get to enjoy all year round.

Snowy Hydro, through our retail energy company Red Energy, will once again sponsor the ski fields this year so keep your eyes and ears out for our Red Energy signs and sounds on local radio stations at Thredbo, Perisher and Charlottes Pass. As a local company employing hundreds of people in the region, we’re proud to back the Snowy Mountains and get the message out about our 100 per cent Australian owned and operated energy brand – Red Energy – which is backed by the mighty Snowy Hydro.

Red Energy has been a major sponsor of festivals and events across the region throughout the year, including the very successful Back to Cooma Festival over the Easter long weekend and the more recent Festival of the Falling Leaf in Tumut. Our enthusiastic staff are always happy to chat to potential customers about the benefits of switching to Red Energy and we have been working with businesses across the region in the past few months, spruiking the benefits of Red Energy which is an industry leader in customer service.

With the arrival of winter, locals and visitors alike are keen to know all about the predictions for snowfall. Accurately predicting the weather is a tough business. Snowy Hydro is incredibly lucky to have a talented team of climate scientists who work with us to read and interpret climate indicators to give us as in-depth a view as possible about predicted rainfall, snowpack and inflows to the Snowy Mountains Scheme.

But broadly, we are looking to move out of El Niño with a high chance of La Niña meaning the next few months are looking to be wetter than average, but also warmer. This is good news for predicted inflows into the Snowy Scheme and means we will have healthy water levels to sustain higher levels of generation across the Scheme this year and to deliver downstream to town water supplies, the environment and irrigators.

On the generation front, we have just completed major upgrade works at our Tumut 1 Power Station at Cabramurra and will be moving our major works team to Khancoban to start major works on our Murray 1 Power Station. This is good news for the Khancoban community as, at its peak, we can expect around 80 additional staff working in the region with around 40 staff there permanently for the predicted works over at least a six month period. We understand how important it is to invest in and support our local communities to ensure they remain healthy and vibrant for our workforce and their families.

Lastly, an important reminder about safety. At Snowy Hydro, the safety of our employees and the people that live around and interact with the Snowy Scheme, is our highest priority.

We have noticed in recent times an alarming increase in the number of near misses on the roads around the Snowy Mountains. We drill into our staff the importance of safe driving and the majority of our Snowy Hydro car fleet has speed monitors installed which alert us when drivers are driving over the speed limit. Country roads have their own challenges – wildlife including kangaroos and brumbies, snow, rain and visibility challenges, as well as large trucks and caravans.

Please take care on the roads in and around the regions. Adjust your speed to suit the conditions and keep a watch for other drivers who may be doing the wrong thing. Thankfully, none of our near misses has resulted in serious injury to our staff. But you can never be too careful with your life. It’s critically important that everyone goes home in the same shape, or better, each and every day. Take care when you’re out there.