They've already burned at least $15bn on that disastrous Snowy Hydro "battery" project... Could've just rolled out consumer batteries on a large scale instead.
At current battery project prices, matching Snowy 2.0’s roughly 350 GWh of energy storage capacity with Tesla Megapacks would cost around AUD $218 billion [0] and require Tesla’s entire global Megapack production capacity redirected to a single client for five years.
$15 billion is far more than Snowy 2.0 should have cost. But it remains substantially cheaper than any lithium-ion battery build for bulk storage. Storage on this scale is essential in a post-coal electricity grid, and batteries are not (yet) plausible substitutes for bulk storage.
[0] This assumes linear scaling. In reality, placing an order like this would grossly distort supply and demand on many levels. Thus the cost would ultimately be superlinear.
Snowy 2.0 has major limitations on what it can supply, the headline number is very misleading.
And the comparison shouldn't be to batteries alone, but solar/wind and batteries. The former can be used directly and fill the batteries repeatedly on a timeline that is predictable.
It provides no extra value for the electricity to be stored long term if for the same money you can generate and store it short term.
Your reply — and especially the attached article — misunderstand the reality of operating a grid at scale.
Responding to you:
Solar and wind are just as relevant to pumped hydro, which is really just a different kind of battery. The real question is how much short-duration storage is needed from chemical batteries and how much long-duration storage is needed from pumped hydro. Chemical batteries are essential for grid stabilisation, frequency control, and intra-hour balancing. They're necessary, but not sufficient.
Pumped hydro provides something that no economically realistic combination of batteries, solar, and wind can yet deliver at scale: enough stored energy to contribute towards grid stability through consecutive overcast, low-wind days. The main alternative is to build and maintain gas-fired peaking plants for occasional backup, which is both costly and keeps us dependent on fossil fuels.
Responding to the article:
While there are credible doubts about the value of Snowy 2.0, the article does not establish its headline claim that batteries are a cheaper system-level alternative. Most critically, it doesn't acknowledge the role of pumped hydro as an insurance asset. The point of insurance isn't to be cost effective in normal times, it's to be cost effective against the risk-adjusted consequences of grid destabilisation.
It is true that under normal conditions, Snowy Hydro would have little incentive to discharge fully because doing so could depress market prices. That is why capacity contracts, underwriting arrangements and reliability options exist. We know that strategic storage has substantial social value that its owner cannot fully capture through energy arbitrage. This is a common problem for reliability assets: their success can destroy the scarcity rents needed to finance them. Hence contracts.
We want to eliminate fossil fuels and lower costs as quickly as possible.
Vague claims that some alternative like nuclear or Snowy 2.0 will somehow make that last 1% of fossil easier to eliminate are both dubious and irrelevant if their construction uses money that could have easily eliminated 1% of fossil fuel every year for decades.
And once we get close to that last few percent of fossil gas in the electric system it would be better for costs and climate to focus on electrifying industry and homes with cheap electricity anyway.
Yeah the battery storage story has to acknowledge the fact that global production capacity simply isn't actually high enough to deliver that many batteries so we need alternative solutions to the problem as well.
The cost of the Snowy 2.0 pumped-hydro project is estimated to range from \(\$12\) billion to as high as \(\$42\) billion depending on the scope of costs included (such as direct construction, interest, and broader transmission). Originally announced in 2017 with a $2 billion price tag, the project has faced massive scale and logistical blowouts. The cost of the Snowy 2.0 pumped-hydro project is estimated to range from $12 billion to as high as $42 billion depending on the scope of costs included (such as direct construction, interest, and broader transmission).
That said , hydro systems have a LONG LIFESPAN - 100 YEARS ?
Batteries need to be replaced every X years.
So the ecomiomics of the comparisoan would need to be calculated ...
All the complexity has been in geotechnical issues, pockets of mud, sinkholes, then ultra hard rock, then loose shale, damage in blasting operations, needing to pump liquid nitrogen into the rock to deal with subterranean water flow, soluble limestone etc etc.
One of the scariest industrial deaths you can imagine: cutting into a pocket of shale and the TBM and crew just vanishing into the maw of the Midgard serpent and the whole tunnel filling.
That was exactly the point of the project though - it was designed by the conservative side of politics in our country to try and crowd out investment in batteries and other renewables while taking enough time to build to keep coal plants operating longer in the meantime.
It didn't work at all for that though - we had a lot of private investment in large-scale batteries anyway, because the cost came down quickly just as most people (apart from the conservatives) expected. Then the other side of Government got in and put a subsidy scheme to get hundreds of thousands of home batteries installed, which has been multiple times better bang-for-buck than the Snowy 2.0 scheme, as well as taking far shorter a time. At the same time coal plants are shutting down as expected because they are increasingly unreliable given their old ages.
Snowy 2.0 be an expensive stranded asset basically, it will work and be somewhat useful but extremely uneconomical so basically relying on the cost being written off - if it had to recoup any investment then it couldn't run because it'd never be able to sell the power for high enough.
$15 billion is far more than Snowy 2.0 should have cost. But it remains substantially cheaper than any lithium-ion battery build for bulk storage. Storage on this scale is essential in a post-coal electricity grid, and batteries are not (yet) plausible substitutes for bulk storage.
[0] This assumes linear scaling. In reality, placing an order like this would grossly distort supply and demand on many levels. Thus the cost would ultimately be superlinear.