Malcolm Turnbull has used his expansion plans for the Snowy Hydro to try to outdo South Australia on battery storage, saying it would provide 20 times the capacity of the battery system proposed by the premier, Jay Weatherill.
The prime minister visited the Snowy Hydro power station on Thursday to spruik the benefits of the expansion plan on the same day his energy minister, Josh Frydenberg, had an onscreen altercation with Weatherill at the launch of a virtual power station.
The Turnbull government continues to be at odds with the Labor states over energy policy, with the prime minister criticising South Australia for its high use of renewables and Victoria for its gas exploration moratorium.
Turnbull said his plan to develop pumped hydro would effectively turn Snowy Hydro into a giant energy storage system.
“In one hour it could produce 20 times the 100Mwh expected from the battery proposed by the South Australian government but would deliver it constantly for almost a week (or 350,000 Mwh over seven days),” Turnbull said.
If the plan to add pumped hydro storage to the Snowy Hydro company goes ahead, it is expected to cost $2bn and create 500 jobs. But, initially, the Turnbull government is providing $500,000 for a feasibility plan completed by the end of the year.
Snowy Hydro is jointly owned by the federal government, the New South Wales government and the Victorian government. Turnbull promised the federal government would contribute “on a commercial basis” if the other shareholders did not want to contribute and he underlined it would make money for the company.
“We would look forward to the other shareholders contributing to it but, if they don’t wish to contribute additional equity and they would rather the commonwealth government did that, we are very happy to contribute equity on a commercial basis into this project,” Turnbull said. “That is our commitment.”
While Turnbull said the NSW government was enthusiastic about the plan, the Victorian energy minister, Lily D’Ambrosio, told the ABC on Thursday morning that she had not been briefed. But Turnbull said the states, as shareholders, were fully briefed.
“The news is what we heard on the radio and what we woke up to this morning,” D’Ambrosio said. “This is the way the prime minister is leading this country, so-called.”
Asked if Victoria would part fund the Snowy Hydro, D’Ambrosio said, “We don’t have problems keeping the lights on in Victoria.”
The Victorian premier, Daniel Andrews, said he hoped the Snowy Hydro plan spelt an end to Turnbull “bagging out the states”.
“If it actually means Malcolm Turnbull is going to do something, then I expect that would be welcomed by every single Victorian,” Andrews said. “I would certainly welcome creating new jobs potentially and providing additional power.”
The initial $500,000 in commonwealth funding will allow the company to review the geological studies and technology required to build 27km tunnels required to expand the facility.
“These projects were designed and engineered decades ago by the men and women who built this,” Turnbull said. “The capacity was there, all that was missing was leadership and money. My government has both.”
The expanded system would add 2,000MW to the hydro scheme’s 4,100 MW capacity, enough to power 500,000 homes but would be stored in the system. The construction would include new tunnels and energy turbines to pump water uphill during off-peak times so it can be generate electricity by flowing downhill when demand is high.
Turnbull said that, subject to environmental approvals and finance, work would begin in 2018.
Prof Ken Baldwin, director of the ANU Energy Change Institute, said the expansion of pumped hydro storage was welcome but it needed to be part of a national energy plan following the imminent release of the Finkel report.
“The announcement of a revitalised Snowy Hydro scheme for energy storage is welcome and comes hard on the heels of the South Australian government’s recent energy initiative that also incorporates storage,” Baldwin said.
“However, what is urgently needed is a national energy plan for these initiatives to plug into. The energy sector has been paralysed by a decade of government policy uncertainty and is now creaking under the strain as technological advances overwhelm it.”
The chief executive of the Snowy Hydro scheme, Paul Broad, said Snowy Hydro was already acting to balance the volatility of the system.
“If frequency drops too much, you start getting brownouts,” Broad said. “We are a first-world country. We haven’t had that for a long time in our country. This upgrade at Snowy will sustain that for a generation.”
Bill Shorten said Labor wanted to examine the plan but said it was worth exploring.
“Like so many of Mr Turnbull’s ideas, it asks more questions than it answers,” Shorten said.
“Is it really just going to be $2bn or will the cost to Australians be much higher? Have we got all the technical solutions worked out? How long will this measure take? Is it five years or 10 years? Is this just a feasibility plan for an unfunded scheme which will take the best part of a decade to come to fruition?”