Snowy Hydro has signed eight wind and solar contracts to provide cheaper energy to 500,000 households to bring on significant new energy supply and much-needed competition to the market.
The eight projects, totalling 888MW, are located across New South Wales and Victoria and are expected to generate about 2.8 terawatt hours of energy annually.
The new renewable energy generation, firmed by existing Snowy Hydro assets, is a game-changer and will push down future energy prices.
The renewable energy contracted will enable Snowy Hydro to offer very competitive, firm wholesale prices (ie. the cost of the raw renewable energy plus the cost of ‘firming’) – for below $70/MWh for a flat load, for up to 15 years.
“Snowy Hydro is a key provider of fast-start, “capacity”-type products, and we keep the lights on at times of high demand,” the company said in a statement.
“However, we are ‘energy short’ (meaning that we do not generate enough energy from own power stations to cover all of our customers) so we have to purchase energy from the wholesale market. We are one of the largest energy buyers in the NEM and, just like households, we are exposed to high wholesale prices.”
Over the last 12 months, there have been rapid changes in the NEM and competitive pricing across all generation technologies has seen the cost of renewables fall.
Snowy Hydro was overwhelmed with the level of interest in itsRenewable Energy Procurement Program, which saw more than 17,600MW of projects submitted through the procurement process. All eight winning projects are expected to come online within the next two years.
Snowy Hydro’s existing hydro, gas and diesel assets give them the ability to firm up vast amounts of intermittent renewable generation today to ensure energy is available when needed.