Jennifer Marohasy

a forum for the discussion of issues concerning the natural environment

Snowy Hydro

Report on Tumut flooding raises more questions than it answers

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LAST December Snowy Hydro dumped water into the already flooded Murray-Darling, but said it had little choice.   A report just released by the NSW Office of Water clears Snowy Hydro but only in so much as it states that Snowy Hydro operated in accordance with its licence conditions.

At issue has always been whether these licence conditions were fair both to Snowy Hydro and those living and working in the Tumut and along the Murrumbidgee.    In particular did Snowy Hydro’s licence conditions, as enforced by the NSW Office of Water, oblige Snowy Hydro to make releases that contributed to the flooding?

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Questions over Snowy Hydro Water Management

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 It is the ultimate in hypocrisy for the Commonwealth government to be insisting farmers give back water under a new planning scheme to save the environment, while continuing to pocket millions from water wasted by Snowy Hydro for derivative trading on the electricity market. 

LAST night on ABC Television’s 7.30 Report, journalist Bronwyn Herbert explained how water was released from Eucumbene Dam by Snowy Hydro for electricity generation at the height of flooding in the Murrumbidgee late last year. At the time Eucumbene Dam was at less than 30 percent capacity while the lower storages were spilling. In releasing the water for non-essential electricity generation, Snowy Hydro not only contributed to the flooding, but was wasting water, water that could have been stored for the next drought. Lake Eucumbene is the central storage for the entire Snowy scheme with the capacity to hold the equivalent of nine Sydney Harbours of water.

Since June 2001 when Snowy Hydro Ltd was incorporated, the corporation’s priority has been revenue generation for its shareholders through electricity generation. The shareholders are the Commonwealth, Victorian and New South Wales governments.

During the recent drought years Snowy Hydro waters contributed to about 60 percent of inflows to the Murrumbidgee and 30 percent of inflows to the Murray River. But then and now, there is no imperative for the management of these waters to complement or accord with water allocations within the Murray Darling Basin.

Given Snowy Hydro’s shareholders are the government, it would seem sensible that these shareholders apply some pressure to the corporation and at least encourage the Managing Director, Terry Charlton, to operate the electricity generating business responsibly.

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Bronwyn Herbert Investigates Snowy Hydro

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Before the recent flooding, there was much lamenting about how there is never enough water in the Murray Darling Basin for both irrigated agriculture and also the environment.   Yet in all this discussion no consideration has been given to the more integrated management of Snowy Hydro waters with management of water allocations within the Basin proper.  

Over the recent drought years Snowy Hydro waters contributed to about 60 percent of inflows to the Murrumbidgee and 30 percent of inflows to the Murray River.   

Since its corporatisation, the priority for Snowy Hydro has been electricity generation and so now, while the catchments are flooding, water is being taken by Snowy Hydro from Eucumbene Dam and sent through turbines before being released into Blowering Dam which is spilling into the saturated Murrumbidgee catchment.  

An alternative management arrangement that gave precedence to water storage over electricity generation would undoubtedly see water being stored during this period of high flows in anticipation of the next drought. 

Given the high inflows over recent months it is indeed extraordinary that Lake Eucumbene, the central storage system for the Snowy Hydro scheme, remains at less than 30 percent capacity and that water is being drawn from this storage for electricity generation.

Bronwyn Herbert has been considering these and other issues and her investigation will feature tonight on the ABC Television 7.30 Report*. 

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*The program can also be watched from your computer http://www.abc.net.au/iview/?gclid=CJaDoMLCiacCFQU3pAod5DUydQ#/series/7.30%20Report?WT.srch=1&WT.mc_id=CORP_srch_iview

For background on Snowy Hydro scroll here: https://jennifermarohasy.com.dev.internet-thinking.com.au/blog/tag/snowy-hydro/

Snowy Hydro – Water Management: Part 3, by Max Talbot

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“THE 75 year Snowy Water Licence (issued in 2002) provides flexibility to Snowy Hydro to store and release the Scheme’s water resource for electricity production and derivative trading and sub-optimises the use of the water for irrigation, communities and the environment.

“It also falls short of providing optimum regulation of the combined Snowy Scheme, Murray and Murrumbidgee River storages.

“It needs to be extensively revised and fully integrated with the yet to be developed Murray – Darling Basin Plan so as to optimise the regulation of the combined Snowy and Murray – Darling systems.”   

These are the conclusion of Max Talbot, former Executive Officer at Snowy Hydro, and Operations Engineer Snowy Mountains Council. 

Mr Talbot recently updated a document ‘Snowy Hydro – The Business’ penned in 2008 and has generously given permission for me to publish this document as a four part series.  Following is Part 3 – concerning Water Management.

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Snowy Hydro – The Business: Part 2, by Max Talbot

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OVER the last few weeks I have posted information suggesting that Snowy Hydro has not managed the vast waters under its control appropriately and in particular that it has failed to store flood waters for subsequence seasons and even exacerbated flooding in the Riverina by making water releases from Lake Eucumbene – the system’s central reservoir.

Max Talbot was the Executive Officer Strategic Engineering at Snowy Hydro and Operations Engineer Snowy Mountains Council for many years, retiring in 2003.  He has written extensively on the Corporation and recently updated a document ‘Snowy Hydro – The Business’ penned in 2008.   Mr Talbot has generously given permission for me to publish this document as a four part series.  Following is Part 2 – explaining sources of revenue and more.

Snowy Hydro Ltd. – a Corporate Entity

Overview

The Snowy Scheme was corporatised and began operation as Snowy Hydro Ltd in 2002.  Snowy Hydro is incorporated under the Corporations Act 2001 and is a public company limited by shares.  Shares were issued gratis to the Commonwealth, NSW and Victorian governments in the percentages of their electricity entitlements, i.e., 13, 58 and 29% respectively.  The Snowy Mountains Authority’s outstanding debt of about $700m was transferred to Snowy Hydro who was required to refinance it and repay the Commonwealth.

Corporatisation was achieved via the negotiation and implementation of a series of “agreements” (46 in total) of which the 75 year water licence – that sets out Snowy Hydro’s rights and obligations with respect to management of the Snowy Schemes water resource – and the transfer of the Schemes infrastructure and assets are of critical importance to the viability of its business

Snowy Hydro is a successful member of the NEM where it occupies a unique position selling peak and shoulder energy and energy services to the market and risk management products to other market participants. Since corporatisation it has widened its activities beyond the Scheme into gas turbine generation and electricity retailing. It had an income of $781.9m in 2009-10 and a net profit of $266.9m after tax of $113.7m.

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Snowy Hydro – The Business: Part 1, by Max Talbot

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OVER the last few weeks I have posted information suggesting that Snowy Hydro has not managed the vast waters under its control appropriately and in particular that it has failed to store flood waters for subsequence seasons and even exacerbated flooding in the Riverina by making water releases from Lake Eucumbene – the system’s central reservoir. 

Max Talbot was the Executive Officer Strategic Engineering at Snowy Hydro and Operations Engineer Snowy Mountains Council for many years, retiring in 2003.  He has written extensively on the Corporation and recently updated a document ‘Snowy Hydro – The Business’ penned in 2008.   Mr Talbot has generously given permission for me to publish this document as a four part series.  Following is Part 1 – providing an historical perspective.

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