The Clean Energy Finance Corporation (CEFC) will invest $125 million in the development of Snowy 2.0 pumped hydro critical grid infrastructure.
In its first major grid infrastructure investment, the CEFC will fund TransGrid Services to increase the amount of reliable and secure electricity to the National Energy Market (NEM).
The CEFC corporate debt facility with TransGrid Services is part of a complex project to connect Snowy 2.0 to the NEM.
TransGrid Services will draw on the CEFC finance to design, construct, operate and maintain a new 330kV switching station and associated transmission lines as part of its agreement with Snowy Hydro Limited to provide connection services for 30 years.
Energy and Emissions Reduction Minister, Angus Taylor, said the project will ensure the benefits of Snowy 2.0 are felt across the entire NEM.
“Snowy 2.0 is Australia’s largest renewable energy project and will deliver reliable and secure energy to thousands of Australian households and businesses,” Mr Taylor said.
“It’s all part of our strong action to stabilise the grid and get the energy generation balance right to deliver affordable, 24/7 reliable power.
“This is yet another initiative by our Government to bring power prices down and keep the lights on for Australians.
“Importantly, as we recover from the COVID-19 recession, Snowy 2.0 will stimulate the economy and create jobs.”
Finance Minister, Simon Birmingham, said the CEFC was established to facilitate increased investment into the clean energy sector and has delivered significant projects.
“Infrastructure projects like Snowy 2.0 will play a key role in Australia’s economic recovery by creating jobs and boosting economic activity,” Mr Birmingham said.
“More than 500 people and 100 local businesses have already been engaged on this project and we expect 5,000 direct and indirect jobs to be created over the life of the project, with the potential for many more jobs to be created locally and in the broader region through supply chains and support services.”
The project will also support new Renewable Energy Zones in southern NSW, including 1,900MW of renewables projects in construction or under development, by enhancing security and reliability of supply via Snowy 2.0.
CEFC CEO, Ian Learmonth, said, “Investment in new storage, transmission and related infrastructure is essential to support the security and reliability of the grid during Australia’s clean energy transition.
“Our ability to offer investment certainty in challenging market conditions is evidence of the critical role the CEFC can play in supporting grid related developments.
“Snowy 2.0 offers large scale energy storage and quick start electricity generation during peak demand, providing critical security and reliability services to the NEM.
“We are delighted to be working with TransGrid Services in investing in this exciting project.”
On behalf of TransGrid Services, Richard Lowe, said, “We are pleased to be part of this landmark investment with CEFC and delighted to support our long-standing customer Snowy Hydro in the development of the Snowy 2.0 project.
“Snowy 2.0 is an important project for Australia. It will be the largest generator connecting to the NSW grid for over 30 years, a critical component in supporting the energy system transition as well as securing low emission and low-cost energy for consumers.”
The AEMO 2020 Integrated System Plan identified Snowy 2.0 as a critical project for NSW and the NEM, with the potential to unlock the value of both existing and new renewable energy, while delivering reliable energy to consumers.
The Federal Government has introduced legislation to create a $1 billion Grid Reliability Fund (GRF) to be administered by the CEFC.
The GRF will support investment in new energy generation, storage and transmission infrastructure.
The proposed $1 billion for GRF projects is in addition to the existing CEFC $10 billion capital allocation.
“Through our specialist Clean Futures Team, we have a strong focus on investment in grid augmentation, including transmission, interconnectors, renewable energy zones, hydro, grid-scale battery storage and hydrogen,” Mr Learmonth said.
“We are confident CEFC capital, combined with our expertise in developing new markets and building investor confidence, can help accelerate investment in national building projects that can meet the rapidly evolving requirements of our energy network.
This investment with TransGrid Services is an example of the kind of further national building investments we will be able to make through the GRF once it is established.”