The federal government’s major expansion of the Snowy Hydro scheme is technically and financially viable, according to a feasibility study.
The study, to be released on Thursday, examined the project which aims to increase the generation capacity of the iconic scheme by 50 per cent, making up to 2000 megawatts available to the national electricity market.
“The feasibility study clearly demonstrates that Snowy 2.0 is a viable pumped hydro project that will future-proof the national electricity market, helping stabilise the system and deliver lower prices,” Prime Minister Malcolm Turnbull said.
The study will also find Snowy Hydro can finance the project itself using retained earnings and borrowing.
The project involves linking two large dams and expanding the iconic power generator’s capacity and storage ranges.
Snowy Hydro 2.0, promoted by Mr Turnbull as “nation-building”, has been estimated to cost between $2 billion and $6 billion.
He says it will create a more affordable and reliable energy system while also generating 5000 direct and indirect jobs to boost the economy.
Work is not expected to start until 2024, with the project involving a 200-metre long cavern which will require large amounts of rock to be excavated.
“As Snowy Hydro acknowledges, there are geological challenges but these can all be overcome as the 27km of tunnels and the underground powerhouse cavern are constructed,” Mr Turnbull said.