"We are going to put the accelerator down on Snowy Hydro's development," the Prime Minister declared. "This is a great project and as it is expanded, it will ensure that Australian families and Australian businesses have more reliable power." And yet, Snowy 2.0 may just be the first step. If it proves viable – and that's a big "if" – behind closed doors there's talk of Snowy 3.0, Snowy 4.0 and Snowy 5.0, quadrupling the output to around 8000 megawatts, making it the largest power-grid battery in the world, dwarfing exisitng schemes in the US and China. "The more we head down towards decarbonising the economy, the more pumped hydro and hydro in general, the more important they will become in the whole energy market," Snowy Hydro chief executive officer Paul Broad says. But not everyone is a convert. Danny Price, managing director of Frontier Economics and an energy sector veteran, is scathing. "Pumped hydro makes no economic sense. It will never be built," he says bluntly. The Snowy Hydro Tumut 3 power station in Talbingo. Photo: Alex Ellinghausen

Underpinning Broad's vision splendid is a simple concept: pumped hydro. Traditional hydro gathers rainfall in alpine dams, gravity feeds the water down pipes to spin turbines and generate electricity. Pumped hydro reverses the process, using electricity to pump the water back uphill into those self-same dams. The water can then be reused, making more electricity when demand warrants it. It's a way of storing electricity; a giant battery. The great advantage of hydro power, whether traditional or pumped, is that it can quickly provide large amounts of power for sustained amounts of time, known as "peaking" generation. The big coal-fired power stations provide base-load power, but their output cannot be quickly ramped up or cut back to match demand, while wind and solar remain hostage to the weather. Snowy 2.0 would require a 26-kilometre tunnel linking Tantangara Reservoir to Talbingo Reservoir, a bolt-on to the 145 kilometres of tunnels in the existing Snowy Mountains scheme. Tantangara Reservoir dams the headwaters of the Murrumbidgee River at around 1200 metres above sea level; Talbingo Reservoir sits on the Tumut River below 600 metres. It's that dramatic difference in altitude that would enable significant amounts of power to be generated using a relatively small amount of water. A new 2000 megawatt power station would be built 800 metres underground, nine kilometres from the end of the tunnel, accessed from the surface down a slanting, 3.5 kilometre road tunnel. The new station would be the biggest hydro station in Australia.

Snowy 2.0 would would require no new dams or reservoirs and additional transmission lines would follow existing corridors. Most of the construction would take place underground. Nevertheless, it is entirely situated within the Kosciusko National Park. An access road to the new power station would be required and there is the vexed question of what to do with the spoil – the hundreds of thousands of tonnes of rock carved out of the mountain to form the tunnels. Nevertheless, the Australian Conservation Foundation has cautiously welcomed the proposal, saying it's better than new coal or gas generation. "[But] it's unlikely that it can deliver affordable, reliable electricity faster than comparable investment in wind or solar," ACF's Gavan McFadzean says. Snowy 2.0 would provide an added benefit, helping to relieve an existing bottleneck restricting the Tumut 3 station's output. Producing up to 1800 megawatts, it's by far Snowy Hydro's biggest existing power station, but it's dependent on water flowing down the Tumut River through the much smaller Tumut 1 and Tumut 2 power stations and into Talbingo Reservoir. It takes 10 days for enough water to pass through T1 and T2 to provide enough water for T3 to operate for one day at full capacity. That bottleneck has already proved near disastrous. In early February, temperatures in Canberra and Sydney exceeded 40 degrees, placing extreme stress on the grid. "On the tenth of February this year in New South Wales, the lights stayed on because T3 was going flat out. And we almost ran out of water," Broad recalls.

The new scheme would permit water to flow directly from Tantangara through the new station into Talbingo Reservoir, increasing the water available to Tumut 3. The two stations, both with pumped hydro, could then run in tandem. This is the genesis for expanding Snowy 2.0 even further. The new station could generate more power than Tumut 3 while using only a quarter of its water, due to the large altitude differential between Tantangara and Talbingo. That's why engineers believe the concept could be replicated up to three-fold: Snowy 3.0, Snow