Energy and Environment Minister Josh Frydenberg has warned Australians would pay more for electricity and have more volatile supply if the Snowy 2.0 hydro project is not built.
The energy and environment minister has strongly argued in favour of the scheme despite the feasibility study revealing its estimated cost had blown out by more than $2 billion.
The proposed Snowy 2.0 pumped hydro scheme is projected to add 2,000MW of capacity to the existing hydro plants and 350,000MWh of storage.
“With the capacity to store enough energy to run for seven consecutive days at its maximum output, Snowy 2.0 will be Australia’s biggest battery,” Mr Frydenberg said.
He warned that without Snowy 2.0, Australia’s east coast in particular would have “a weaker and more expensive system and we would have failed to future-proof the grid for the inevitable arrival of more intermittent renewables”.
“Instead of falling electricity prices we will see upward pressure on price as volatility continues, there is less competition and other more costly gas peakers and batteries are pursued to stabilise the system.”
According to The Guardian, Mr Frydenberg said the lack of storage and dispatchable power was “playing out painfully today in Victoria and South Australia”, with “expensive, polluting diesel generators using up to 80,000 litres of fuel an hour [which] have been called in just to keep the lights on this summer”.
Frydenberg said nation-building infrastructure would not come cheap but highlighted that Snowy Hydro could fund the project off its own balance sheet.