Snowy Hunter Gas Project Faces Delays and Cost Overruns, Total Now Exceeds $2 Billion

The Snowy Hydro News Update recently announced the commissioning of the 660 MW Hunter Gas Power Station Project (HPP). However, beneath the optimistic headline lies a project marred by escalating costs, now surpassing $2 billion, and completion delays extending to mid-2025—two years past its original target.

Initially greenlit by former Prime Minister Scott Morrison in 2021, HPP was intended to cost $600 million and be operational by late 2023 to replace Liddell Power Station. The project promised jobs, lower energy costs, and emissions reductions. Yet, industry experts flagged from the start that these claims were unfeasible, with HPP unlikely to generate sufficient revenue to recover its expenses.

Over time, the project's budget has ballooned—$950 million in 2022, “around $1.3 billion” today—and its timeline has repeatedly shifted, with the latest delay attributed to “extreme weather and other factors,” the specifics of which remain unclear.

The staggering $2 billion estimate omits crucial components, such as financing, land, and gas pipeline connections. The pipeline alone, initially pegged at $100 million, now stands at $450 million and is expected to rise further with operational costs and overruns. These hidden expenses echo the omissions in the Snowy 2.0 project, where essential transmission connections were excluded from cost estimates.

The project's fundamental flaw lies in its location, requiring a costly pipeline extension, compressors, and storage infrastructure. Even with these measures, HPP can only supply full output for 10 hours before requiring more than a day to refill its storage—far short of the dispatchable energy needed.

HPP's limitations are magnified by advancements in battery technology. Eight-hour batteries now rival HPP in capital costs while boasting lower operating costs, zero emissions, and faster response times. Despite early discussions of hydrogen compatibility, Snowy Hydro dismissed this option as uneconomical, further undermining the project's long-term viability.

With costs quadrupling from initial estimates and no clear pathway to economic viability, the Hunter Power Project raises critical questions about fiscal responsibility. The government must provide a transparent breakdown of the project's total cost, its economic justification, and plans to hold Snowy Hydro accountable for its management failures.

EServices4U specializes in energy-saving consultancy, renewable energy installations, and energy procurement services. If your community is navigating the complexities of integrating new energy solutions, our expert team is ready to assist with tailored strategies that reduce costs and foster sustainability. Visit www.eservices4u.com.au to learn more.