Snowy 2.0




PROJECT
PIPELINE
STATUS

Prospective pipeline

Credibly proposed

Announced

Under procurement

Preferred bidder announced

Recently closed
Snowy 2.0
STATUS

Prospective pipeline

Greenfield (construction) or brownfield (government asset divestment) projects needed or likely to occur within the next five years, but is not formally proposed by a state, territory or major local government.

Credibly proposed

The project or divestment is supported by a state, territory or major local government, is subject to studies or other processes (such as pre-feasibility or scoping studies or business case development), and is likely to proceed to formal announcement.   

Announced

The project has a firm commitment and timeline from a state, territory or major local government, but has not yet entered the market.

Under procurement

The project or transaction is under procurement (such as a call for Expressions of Interest, requests for tender, or another offer to the market).

Preferred bidder announced

A preferred bidder has been selected and is in exclusive negotiations.

Recently closed

Projects that have progressed to contractual close remain on ANZIP for 12 months.

ANZIP is focused only on major infrastructure activity, above the following thresholds:

Australia

Construction projects: > AUD$300m

Investable greenfield & brownfield: > AUD$100m

New Zealand

All greenfield and brownfield projects and divestments: > NZD $100 million


STATUS: Recently closed
VALUE: $5.1bn AUD
SECTOR: Energy
JURISDICTION: Commonwealth
PROCUREMENT APPROACH: Traditional procurement
TYPE: Greenfield

The Snowy 2.0 project is a proposed expansion of the existing Snowy Hydro Scheme, in the Snowy Mountains region. The Federal Government first proposed the expansion project in March 2017 and a feasibility study was commissioned.

The $29 million feasibility study, which was largely completed by the engineering firm SMEC, was approved by Snowy Hydro's Board of Directors in December 2017.

The preliminary cost estimate of the expansion project is $3.8 - $4.5 billion, with up to an additional $2 billion required to upgrade the transmission lines from the Snowy Mountains to Sydney and Melbourne, which will likely be funded from electricity network charges.

In March 2018, the Federal Government announced it had reached an agreement with the NSW and Victorian state governments, taking on full ownership of their respective shares in Snowy Hydro Limited. Snowy Hydro Limited was previously 58 per cent owned by NSW, 29 per cent by Victoria and 13 per cent by the Federal Government. A Federal Government buyout of Snowy Hydro Limited was first proposed in mid-2017. The agreed fair market value of the enterprise is $7.8 billion, which saw NSW receive $4.154 billion and Victoria $2.077 billion.

Following the completion of the buyout, the NSW Government declared Snowy 2.0 as State Significant Infrastructure (SSI). Applications for SSI are subject to consultation and an environmental impact assessment in accordance with NSW Government standards.

Snowy 2.0 is expected to increase generation capacity by 2,000 megawatts, which will power approximately 500,000 homes at peak demand. It would require the construction of a 26 kilometre tunnel that links the Tantangara Reservoir to Talbingo Reservoir, to be built up to 800 metres underground.

The project has an expected six-year construction period.

On 12 December 2018, the independent Board of Snowy Hydro Limited approved a final investment decision to proceed with Snowy 2.0, subject to Shareholder approval. 

On 18 January 2019, Snowy Hydro announced the Future Generation consortium comprising Salini Impregilo and Clough as preferred bidders for the civil works package for the project, while Voith Hydro was announced as the preferred bidder for the electrical and mechanical works package. Leed Engineering was the awarded the pre-construction works contract for the project.

In February 2019, the NSW Government gave planning approval for Snowy 2.0 Exploratory Works. This includes excavating an exploratory tunnel to gain a greater understanding of the underground geological conditions at the proposed location of the new Snowy 2.0 power station. Work on the project will commence subject to shareholder approval from the Federal Government.

Separately, in February 2019, the Federal Government gave shareholder approval for the project to proceed, alongside an equity contribution of 'up to' $1.38 billion, with the balance to be financed by Snowy Hydro Limited. The circa $2 billion required for transmission upgrades is not included under the scope of the project at this stage. 

The 2019-20 Federal Budget confirmed the equity injection of $1.38 billion to be provided over a period of six years from FY2019-20. The commencement of the main project works is expected in 2020.

Snowy Hydro is expected to submit an EIS for Main Works to the NSW Government in late 2019. Early works on the project are now underway.

On 5 April 2019, Salini Impregilo was awarded the $5.1 billion contract for the civil works and electromechanical component of the Snowy 2.0 project (this accounts for future escalation of prices over the eight years of the project). Under the terms of the contract, Salini Impregilo will link the existing Tantangara and Talbingo dams by excavating a series of tunnels and building a hydroelectric power station with pumping facilities located nearly one kilometre underground.



Last reviewed: 18/04/2019

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