From Professor Judith Sloan writing in The Australian today:
Prime Minister Scott Morrison is stretching the truth when he calls Snowy 2.0 fair dinkum power.
Surely pumping water up hill to then be released to generate electricity, with a net loss of energy of at least 20 per cent, is more fairy story than fair dinkum?
But evidently it’s OK because taxpayers, whether willing or not, will have to invest only $1.4 billion into the project with the rest “self-funded’’ by the Snowy corporation itself. Let’s be clear about this: we either pay for this through taxes or through electricity prices.And bear in mind the final cost of the project remains extremely uncertain. It was going to cost $2bn and then it was $4bn. Or was that $4.5bn?
We are not sure whether this includes the cost of the additional transmission infrastructure required. We could easily add another $2bn.
Don’t forget the federal government had to buy out NSW and Victoria because there could be no guarantee those state governments would be as keen on this fairy story (sorry, fair dinkum project) as the Coalition.
Let’s be clear about the economics of this project: it rests on very high and variable wholesale electricity prices. Water can be pumped up the hill when prices are low and released when prices are high. That might be a good deal for the corporation, but it’s not a good deal for consumers.
The endorsement no conservative wants to see.