Hydropower comes from flowing water and for that you need the key ingredient — water. While Snowy 2 will pump water up and then generate electricity by letting it flow down, its’ water needs are much more than just re-using the same water.
Snowy 2’s profitability depends on keeping water in storage to provide immediate baseload power when the unreliables in the grid go down from inclement weather. What we do know is there’s definitely no water in the high mountains as an insurance policy essential for underwriting the unreliable solar and wind power generation.
All the water in Tantangarra is needed for environmental flows into the upper Murrumbidgee. Water taken from the lower dam, Talbingo, is water owned by other users.
I would have thought a $12 billion scheme that uses water for electricity generation would have already sorted out where that water is coming from, but apparently not! I put questions to the department around water availability, water licences, and agreements. I also asked whether Snowy Hydro has sufficient water allocated to meet its agreed insurance policy against the shortfalls of wind and solar.
The responses suggest the disaster movie that is Snowy 2.0 is still playing Act 1.0.
Transcript
Senator ROBERTS: I want to reference the Snowy Montane Rivers Increased Flows: Safety Management Plan 2022-2027. The plan calls for increased flows into the upper Murrumbidgee in a series of high-flow releases from Tantangara Dam. Page 37 is headed ‘Key issues/considerations’. The very first one refers to an increase of 40,755 megalitres to be released into Snowy montane rivers from Tantangara reservoir. This is an increase of 35,800 megalitres from the 2022-23 water year. Is that correct?
Ms Connell: I don’t have that document in front of me. We can take it on notice to look at that. Given conditions over the last couple of years, I wouldn’t be surprised if there had been an increase from 2021-22 to 2022-23. I would need to take it on notice.
Senator ROBERTS: It seems to be to repair or restore the Murrumbidgee. I am not arguing that case.
Senator McAllister: Senator Roberts, I think you’ve heard the official say that she doesn’t have the document in front of her.
Senator ROBERTS: I will get it on notice.
Senator McAllister: If you did want to ask further questions about that, presumably we can find it. Providing the reference would assist us to do so.
Senator ROBERTS: It is by the New South Wales government. You can have this, if you like.
CHAIR: Maybe table it, Senator Roberts.
Senator ROBERTS: Tantangara storage holds 250 gigalitres. However, Tantangara reservoir has never been more than 70 per cent full in the 23 years to December 2020. This means there has never been water available to generate 350 gigawatt hours of electrical energy. In addition, the long-term average weekly volume of the Tantangara reservoir in the same 23 years is 18.15 per cent, which allows only 32 gigalitres to be used for generation. The long-term average storage available in Talbingo is found to be approximately 33 gigalitres. These new high-surge flows, plus the existing daily water inflow into the upper Murrumbidgee, will account for 100 per cent of the water storage in Tantangara, based on the last 23 years of inflows. There’s no water in Tantangara for Snowy 2.0. Is this correct?
Mr Fredericks: Senator, in fairness to you, the questions that you are asking are really about the business of Snowy Hydro Ltd. I suspect they will be able to give you a high-quality answer to your question. If it is okay, I will take that on notice for them to come back on notice and respond to it.
Senator ROBERTS: I would like you to answer it.
Mr Fredericks: I can’t answer it. I will take it on notice.
CHAIR: Senator Roberts, the officials from the department will answer what they can. In directing your questions, if the questions are about the operation of Snowy, they need to go to Snowy.
Senator ROBERTS: I understand that.
CHAIR: The department can help you, via the interface they have there.
Senator ROBERTS: I understand that, Chair, very clearly.
Senator DAVEY: To be fair, I was at the Snowy hearing. Senator Roberts did ask these questions of Snowy, and Snowy were a bit ambivalent and suggested that he ask the department.
CHAIR: Put them on notice to both sets and then, through the committee, we’ll deal with whether the response covers your questions.
Senator ROBERTS: I want to know because Snowy Hydro 2.0 said, ‘There’s plenty of water in Tantangara.’ Clearly, there is not.
Mr Fredericks: I will take that on notice for Snowy Hydro.
Senator ROBERTS: Thank you. I would like you to answer the question about the availability of water. This is crucial.
Mr Fredericks: That is fair enough. I will take it on notice.
Senator ROBERTS: The water in Tantangara cannot be used for hydro via the existing connection to Lake Eucumbene, which flows into the Murray, or the new Snowy 2.0 connection, which flows into the Tumut and then the lower Murrumbidgee. This means that all the water for Snowy 2.0 will have to be pumped up from Talbingo before coming down. That’s not a problem. We understand that, because with pumped hydro you either start with the water at the bottom or you start with the water at the top and you end up in the same place. My critical question is about the availability of water. Here is the second question. Snowy 2.0 is making one-third of its revenue from selling insurance policies to underwrite the lack of continuity of supply of unreliable wind and solar as generators. The basic idea is that if an unreliable renewable project, like solar and wind, can’t supply its contracted power then Snowy will let the water flow down the hill and generate power for them. One-third of the revenue of Snowy 2.0 comes from insurance, we were told.
That suggests the water must be available in Tantangara year round to provide for immediate electricity dispatch. We’re talking about critical peak hour generation. The water in Tantangara is fully allocated, so water will have to be pumped up the hill and stored against future needs, under these insurance contracts. Some of that will be lost in seepage and evaporation—quite a lot. How has that been dealt with in Snowy Hydro’s water licence? Does Snowy Hydro have a water licence?
Mr Fredericks: I’ll need to take that on notice. In deference to you, I’ll take it on notice for Snowy and for the department as well.
Senator ROBERTS: I would like an answer from your department in particular. We can get it from Snowy. Do they have water agreements?
Mr Fredericks: On notice.
Senator ROBERTS: If they do have any water agreements, are they sufficient to match the insurance policy that Snowy Hydro is going to be getting one-third of its revenue from?
Mr Fredericks: On notice for both—Snowy Hydro and us.
Senator ROBERTS: This deals with water in the high mountains. Thank you very much.
Mr Fredericks: You’re welcome.
CHAIR: Thank you, Senator Roberts. Senator Davey.
