Snowy 2.0 is an ideologically-driven white elephant. By Saul Kavonic in The Australian.
At about 900 per cent over budget and seven years late, Snowy 2.0 is three to five times costlier than alternative sources of capacity – gas, battery storage and smaller pumped-hydro projects – according to Rystad data. This rises to five to seven times costlier once additional costs are factored in on a like-for-like basis. …
A $2 billion project became $40 billion. Was any due diligence done? About as much as was done on the carbon dioxide theory of global warming that motivated it.
It is now questionable whether Snowy 2.0 should even be finished. Even if one optimistically assumes Climate Change and Energy Minister Chris Bowen is correct that the project is more than two-thirds complete, and ignoring sunk costs, the remaining expenditure may still prove uncompetitive with alternative capacity options. The fact there can be serious debate over the merits of completing a project that is already largely built reveals the scale of the disaster.
The bigger damage to the public has not come from the cost blowouts borne by taxpayers. The 2018 announcement of Snowy 2.0 deterred private investment in new capacity. Investors feared competing with a government-funded project that would flood the market from 2021. When that capacity failed to materialise on schedule — and still won’t for several more years — the market was left short.
This has driven higher prices, inefficient secret deals by NSW and Victoria to prop up coal-fired generation, and worsening reliability. Market experts warned of exactly this outcome at the time. Government didn’t want to listen. …
Ideological project:
How did we end up here? … Snowy 2.0 offered a Holy Grail: a new low-emissions project capable of winning bipartisan backing from Labor and within the Coalition under Malcolm Turnbull.
The government refused to let details such as cost, schedule and design risks derail a powerful (and overdue) political narrative on taking action on energy. …
When Labor took power in 2022, did Bowen make sure to get the project back on track? Of course not. Instead he focused on increasing the cost of Snowy’s other project, the Kurri Kurri gas-fired power station, by demanding it be capable of burning green hydrogen — another foolish politicised prerogative.
How incompetent our ruling class has become.
And from The Spectator:
One Nation’s Barnaby Joyce is scathing about the entire project. Which is relevant, given he was a member of the government that approved it.
‘Like the whole climate cult swindle, it turned into a complete financial disaster,’ laments Mr Joyce. ‘A cost well in excess of $40bn and in excess of a 12-year build for three days of 2000 megawatts of power. Every coal-fired power plant in Australia could have been upgraded for less than the money that was pissed up the wall on Turnbull’s power station in the scrub.’
And Mr Joyce makes this pertinent point:
‘If a public company hid this loss from the accounts at the AGM of the company, there would be possible jail time coming the way of the board members,’ Mr Joyce says.