The Snowy Mountains hydroelectric scheme
How will expansion work?
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The company's chief executive, Paul Broad, says the costs have increased from the initial $2 billion price tag, to somewhere between $3.8 and $4.5 billion.
"The board is committed to doing $60 million worth of work in the next six months to refine those costs and we expect [the cost] is at the lower end of the spectrum," Mr Broad said.
"It's expensive, but it stacks up economically."
Mr Broad said the price had increased due to the complexity of the engineering and building tunnels in the mountains, but stressed the cost estimates were "conservative".
The company, which is mostly owned by the Victorian and New South Wales governments, will fund the expansion rather than the Federal Government.
"It won't be a cost to taxpayers, we will be paying for this out of the balance sheet of Snowy Hydro."
A Senate committee has already heard of risks that costs could skyrocket to $3 billion, once the construction of transmission lines are included.
The feasibility study is likely to suggest that despite geological challenges the project can go ahead.
Malcolm Turnbull promises the project will deliver a more affordable and reliable energy system. (AAP: Mick Tsikas) |
"Snowy Hydro 2.0 is a nation-building project. It will not only deliver a more affordable and reliable energy system but will also generate jobs and grow our economy," Mr Turnbull said in a statement last night.
If it goes ahead, the expanded Snowy Hydro project will be operational from 2024.
Energy has been a major focus of the political year, and the Prime Minister has pinned much of his energy credentials on the project.
"The project will act as a giant 2,000 megawatt battery in the centre of the National Energy Market, providing enough power for 500,000 homes and much-needed backup for the increasing amount of wind and solar coming into the system," Mr Turnbull said.
Energy has also been a flashpoint between the major parties, both at a state and federal level.
On the day Mr Turnbull announced the expansion, his Energy Minister Josh Frydenberg and South Australian Premier Jay Weatherill were engaged in an on-camera spat about the Federal Government's criticism of state energy policy.
Some towns in the Snowy Mountains are already claiming boosts in traffic and people since the project was foreshadowed.
South Australia's Premier shirtfronts Federal Energy Minister on live TV
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