The Snowy Hydro 2.0 project will probably cost five times higher than initially promised by Malcolm Turnbull and may not lower the electricity bill, according to an important energy expert.
Speaking 7:30 On Monday night, the director of the Victorian Energy Policy Center, Bruce Mountain, said that the massive expansion of the hydropower system approved in February of this year would be a "public purse escape".
"Snowy Hydro 2.0 was a political card to get out of prison, played at public expense," he said.
"This is a project that we can safely foresee will be an emptying of the public exchange and whose service in the transition to a cleaner energy future can be satisfied much more cheaply from other sources".
Snowy Hydro 2.0 was announced by Turnbull in 2017 as an exciting solution to the country's energy problems. It would reduce energy prices, make energy more reliable, cut the country's carbon emissions and help Australia move towards more renewable energy.
The Prime Minister then initially promised that the project would cost $ 2.2 billion. But a feasibility study subsequently revised this figure between $ 3.8 and $ 4.5 billion, with tax payers paying $ 1.38 billion and Snowy Hydro to finance the rest. Then, in the April of this year, a contract was signed for only part of its construction for $ 5.1 billion.
Now the dr. Mountain wants the project to be suspended while an independent panel assesses whether the money is well spent.
"Here is a project that will probably cost five times more then the prime minister would have said he would do, and whose capacity is not far from what was claimed," he said.
"Snowy is simply too expensive for what it offers … we can do it cheaper even if things like demand management."
COSTS BLOWOUT DENIES OF THE GOVERNMENT
Turnbull also promised that the Snowy Hydro 2.0 project will be operational by 2021, but now it is not expected to start generating electricity until October or November 2024.
When asked about delays at 7.30am, Energy Minister Angus Taylor denied that the project had jumped on the budget or program.
"The decision was taken on the basis of the December 2017 feasibility study. It was the numbers that matter and the numbers are still in line with that feasibility study," he told Leigh Sales.
The hydro pumped works by using low-cost electricity – usually at night – to pump water up a hill and into the dam, where it is stored until the energy demands begin to peak during the day.
At the end, Snowy Hydro 2.0 should increase the generation capacity by 2000 megawatts and provide 175 hours of energy storage, enough to power 500,000 homes during peak hours.
But there is still a question about how a transmission line will be built to supply electricity generated by the power plant to homes in New South Wales.
Snowy Hydro CEO Paul Broad stated at the ABC that taxpayers should pay the scheme through their taxes or bills.
"Someone will pay it. Taxpayers will pay it through taxes, or you will pay it through your bills, "he said.
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Although Taylor was adamant, the system would have reduced bills from $ 4.4 to $ 6.8 million.
"The reason why there is an opportunity to get better results for consumers is very simple," he told Sales.
"Right now we are seeing tremendous volatility in electricity prices and wholesale electricity prices and this should intensify from the record investment in solar and electricity. wind. The result is that we have very low prices at certain times of the day and very high prices in certain periods of the year, particularly when demand is higher.
"What Snowy can do is store energy when prices are low and use that energy when prices are higher. The result is to lower prices on average and reduce volatility. This is a very significant advantage. "