The Federal Government will spend more than $6 billion on buying New South Wales and Victoria out of the iconic Snowy Hydro Scheme, clearing the way for the Snowy 2.0 expansion to proceed.
More than $4 billion will flow into New South Wales, with another $2 billion going to Victoria to purchase their share of the generating assets. Under the terms of the agreement, the states will need to spend the money on “productive infrastructure” such as rail and road projects.
Clean Energy Council Chief Executive Kane Thornton said the move was a significant development which demonstrates Prime Minister Malcolm Turnbull’s commitment to a cleaner and more diverse energy system for Australia.
“While there are many details still to work through with the project, hydro works as a perfect complement to wind and solar power. A combination of Snowy 2.0 and the planned expansion of Tasmania’s hydro network under the Battery of the Nation initiative should provide an excellent foundation for much higher renewable energy ambition into the future,” Mr Thornton said.
“Battery technology is also coming on in leaps and bounds and will play a massive role in our energy supply a few short years from now.”
The buy-out announcement has been welcomed by Victorian Premier Daniel Andrews and NSW Premier Gladys Berejiklian, who said the money would create an “investment bonanza” in regional areas of the state.
Energy Minister Josh Frydenberg described the sale as “fair value” and said he would never privatise the Snowy Hydro Scheme.
The project was originally built in the middle of last century over more than two decades. Many of the workers on the original project were fleeing a war-torn Europe and moved to Australia in search of a better life.