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Snowy 2.0 put on development fast-track as environmental concerns rise

Snowy 2.0 has been given 'critical' status for NSW, fast-tracking its development, but there are concerns it may skirt environmental obligations.


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Snowy 2.0 put on development fast-track as environmental concerns rise

By Cole Latimer9 March 2018 — 2:03pm

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The Snowy 2.0 Hydro project has been given 'critical' status for NSW, fast-tracking its development, amid concerns it may skirt environmental obligations.

The 'critical' status means the project no longer has to go through as rigorous a planning process and will only require the sign-off of State Minister for Planning Anthony Roberts. However, there will still be some environmental and community impact investigations.

Mr Roberts said Snowy 2.0 and its transmission infrastructure upgrades were essential for the east coast’s energy security, and it was urgent to bring its development forward.

"An expanded Snowy Hydroelectric scheme will add around 2000 megawatts of clean power to our grid and further diversify and strengthen the state’s energy mix," Mr Roberts said.

"This will be crucial to the ongoing energy security of NSW and would significantly boost the dispatchable energy capacity of the National Electricity Market as a whole."

NSW Energy Minister Don Harwin said the fast-tracking of this project could help replace power that's expected to be lost by the scheduled shutdown of coal-fired power stations.

"Snowy 2.0 would only strengthen the state’s position and address energy concerns over the predicted closure of coal-fired power stations in NSW over the next five to 15 years," Mr Harwin said.

Earlier this month the government spent $6.22 billion to acquire Snowy 2.0, which ignited a debate about the project’s feasibility.

Initial studies are yet to publicly reveal the business case of the project, or compare it with alternatives, such as multiple smaller pumped hydro projects.

There has been mixed reaction to the listing by environmental groups, which support the project’s renewable energy capability but are concerned about the impact the development will have on the surrounding national park.

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"Declaring the project 'critical' is a warning sign because it means that even if the Minister does a sloppy job or approval conditions are breached, the community cannot challenge the approval," Nature Conservation Council energy campaigner Dr Brad Smith said.

"The government just made themselves judge, jury and executioner.

"Given the environmental sensitivity of this area, construction of tunnels, power lines and a power station would inevitably affect irreplaceable natural landscapes and threatened species."

Mr Robert said the project will still have a comprehensive environmental assessment.

"After the Department of Planning and Environment issues assessment requirements, the proponents for the project will need to prepare detailed Environmental Impact Statements," he said.

"The proponents are expected to request environmental assessment requirements for the project within the next few months."

Snowy Hydro chief executive Paul Broad said this declaration gives the group a clear way forward for development.

"Like any other project, we are preparing comprehensive Environmental Impact Statements which will include a range of scientific and technical studies to be carefully scrutinised by the NSW Government," Mr Broad said.

"The project’s design is being done in a way that minimises its environmental footprint. This includes putting the majority of the physical structures, such as tunnels and the power station deep underground," he said.

Impact on energy prices

Concerns have also been raised over the project's economic feasibility and the impact it would have on the wider energy retail sector as it is able to flood the market with significantly cheaper energy, distorting prices.

Energy analysts and generators are concerned that changes in price may be driven more by political issues rather than commercial motives.

"It’s got the private sector worried as the government doesn’t operate by the same rules," Grattan Institute energy director Tony Wood said. "You end up with a weird game if the government can set prices and move the market. It really has the potential to distort the market; it doesn’t have to act economically to bring the prices down."

It's not the first time Minister Anthony Roberts has given an energy project 'critical' status.

Photo: Dean Osland

However, this was rejected by the Federal Minister for Environment and Energy Josh Frydenberg.

"Snowy will continue to run as an independent commercial entity," Mr Frydenberg told Fairfax Media.

This is not the first energy project Minister Roberts has given the 'critical' tag.

He had previously called Santos’s Narrabri coal seam gas development a strategic energy project for NSW.

In Queensland, the state government also declared Adani’s Carmichael coal mine 'critical infrastructure' in an effort to fast-track the approvals.

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Cole Latimer

Covering energy and policy at Fairfax Media.

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