The White Elephant Award goes to...Snowy Hydro 2.0

 Q: How does Malcolm Turnbull turn $2 billion into $10 billion?
A: Snowy Hydro 2.0

This month's White Elephant Award goes to the Snowy Hydro 2.0 project after another reported cost blow out of $2.2 billion dollars, with further delays expected to add the current 18 months the project is behind schedule. These delays have already pushed the start date well beyond the original 2025 date. Adding further drama to the project has been the sudden resignation of CEO Paul Broad.

Just to remind readers - white elephant projects are those that cost more than promised, deliver less benefits than projected, and continue to be a drain on the public purse.

Malcolm's Grand Plan

Snowy 2.0 was announced in 2017 by then Prime Minister Malcolm Turnbull as the cornerstone project to enable Australia to transition to a renewable (wind and solar) future, while promising to deliver a more affordable and reliable energy system, generate jobs and grow the economy. It would be the 'battery' for the National Energy Market (NEM).

It was spruiked at the time as a great nation-building project, that evoked the nostalgia of the original Snowy Hydro Scheme that took 23 years to complete from 1949 to 1974.

The trouble is, whenever that term "nation-building" is used in the Australian context - a term that rolls off the tongue far too easily for many a politician- it is somewhat hard not to just yell "white elephant". Sometimes reality can really feel like an episode of Utopia.

What is Snowy 2.0?

In essence, Snowy 2.0 is a pumped-hydro project that revives an old plan to connect two reservoirs in the northern part of the Kosciuszko National Park - Tantangara and Talbingo. Using excess electricity generated from solar and wind, water will be pumped from Talbingo to Tantangara. Then in times of less wind or solar availability, water will be released from Tantangara down the range, passing through hydroelectric turbines to generate electricity.

As stated on the Snowy 2.0 website:

Snowy 2.0 will provide an additional 2,000 megawatts of dispatchable, on-demand generating capacity and approximately 350,000 megawatt hours of large-scale storage to the National Electricity Market. To provide context, this is enough energy storage to power three million homes over the course of a week.

Simple, right? But as always, the devil is in the detail.

The difficulty is that the two reservoirs are a fair distance apart, requiring 27 km of pipelines to link the two. To add further complexity, the power station will need to be installed 850m underground within the mountain range, requiring tonnes upon tonnes of earth and rock to be excavated. Not to mention the upgrading of transmission that is required.

This is where engineering complexity meets economic realities.