Cost and time blowouts on the Snowy 2.0 hydro power project should prompt the Morrison government to take a new look at whether taxpayers should really be strapping themselves to an old-technology scheme, critics say.
But the minister involved in deciding to go ahead with the massive energy storage project says it will still deliver significant benefits.
Energy economist Bruce Mountain – already a sceptic of the need for Snowy 2.0 – says things have turned out a lot worse than originally planned, with costs including transmission now predicted to hit $10 billion and taking at least three years longer.
“It’s just gotten worse and worse and I think will keep on that trend,” he told AAP on Wednesday.
“I think where things have got to and considering the alternatives, it would be wise to press the pause button and take a view independently.”
He’s calling for a new assessment of the project by investment banks – independent of the Snowy Hydro management – that isn’t necessarily designed to give it the go-ahead.
Former prime minister Malcolm Turnbull, who strongly championed the project, says there was extensive economic and engineering analysis done and the costs are consistent with the feasibility study.
“The opponents of Snowy 2.0 are, wittingly or not, doing the work of vested interests in the energy sector who profit from the existing volatility and high prices,” he wrote on Twitter.
Treasurer Josh Frydenberg, who was Mr Turnbull’s energy minister, backed the assessment that “there are some vested interests that want to pooh-pooh this project”.
“It’s very clear that it will have significant benefits to the Australian energy market,” he told reporters in Canberra.
“The reality is Australia, over the years, has not provided enough storage in our energy market.”
Quite apart from the blowouts, technology has rapidly changed since it was approved.
“Things that we just didn’t imagine were possible two years ago are now eminently possible, costs are declining very quickly,” Dr Mountain said.
“We would be very unwise to strap ourselves to a very expensive, yesterday’s technology and sacrifice opportunities to do things much more nimbly with much lower environmental impact.”
He nominates better transmission interconnection, getting demand to follow generation, gas or diesel backup generators, batteries either with customers or in the grid, wind and solar plants, and locating wind turbines in different parts of the country as low-capital outlay alternatives that should be explored first and can be developed quickly.