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

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.

Part 1. The Snowy Scheme – An Historical Perspective

The Snowy Mountains Scheme has its genesis in the 1880’s when the concept of diverting water that flowed south and east from the Snowy Mountains westward to the dry inland was first proposed.

After a long gestation period, and a variety of proposals of how best to achieve the desired outcome, the Scheme was commenced in 1949 with the passing of the Snowy Mountains Hydro-Electric Power Act by the Commonwealth Government and formation of the Snowy Mountains Hydro-electric Authority.  The Authority was a corporation sole headed by a Commissioner.

The Act was established under the defence powers of the Commonwealth because of ongoing dissent, particularly from NSW, thus the emphasis in the Act is on the provision of electricity for defence purposes and for the Australian Capital Territory.  Excess electricity, over and above that reserved by the Commonwealth was to be made available to NSW and Victoria in proportion to their respective populations, i.e. 2/3rds NSW and 1/3rd Victoria.  With the Commonwealth reserving 13% this left 58% for NSW and 29% for Victoria.  These electricity percentages were subsequently used when allocating shares when the Scheme was corporatised in 2002.

Design and construction of the Scheme was financed by the Commonwealth from consolidated revenue with the loans to be repaid over 70 years from completion of each stage of construction.  Electricity was first generated from Guthega Power Station in 1955, with construction continuing to the completion of Tumut 3 Power Station in 1974.

Prior to its corporatisation the Scheme operated under a net cost of production (NCOP) formulae, which covered repayments to the Commonwealth and the cost of operations and maintenance, with the money coming from the electricity utilities of NSW, Victoria and the ACT when they on-sold their power entitlements, forcing the Authority to borrow for capital works.  (NCOP averaged around $150m p.a.)

1957 saw Schedule 1 (known as The Agreement) added to the Act formalising water and electricity sharing arrangements and the establishment of Snowy Mountains Council.
The Council comprised two members from each of the Commonwealth, NSW, Victoria and the Authority with duties, inter alia, to direct and control the operation and maintenance of the permanent works of the Authority for control of water and production of electricity.  State Government members on Council, except for the final few years prior to corporatisation, were the Chief Executives of their electricity and water utilities, whilst Commonwealth members (one of whom was Chairman) were appointed from the bureaucracy.  The Snowy Scheme was thus operated as an integrated water/electricity entity under the direction and oversight of the Council.

Council approved the Scheme’s Annual Operating Plan that set out water release and electricity generation targets for the ensuring year and met quarterly to review the plan, to set the direction for the next quarter and to resolve any conflicts (potential or otherwise) between the release of water for irrigation and its release for energy production.

The Snowy Scheme has a total active water storage capacity of around 5300 gigalitres.  Average annual inflows are around 2800 gigalitres with losses of around 100 gigalitres due to evaporation, spills and riparian releases.

The Scheme contributes inflows of 8% during average inflow years and 33% during drought years to the Murray River, whilst it contributes inflows of 25% during average inflow years and 60% during drought years to the Murrumbidgee River.

The Scheme has an installed capacity of 3900 megawatts and an average annual electrical energy production of around 4500 gigawatt hours (which represents around 4% of the NEM) with a minimum guaranteed annual water release of 2088 gigalitres, the latter being based on the Scheme being able to provide that amount of water annually through a repeat of the design dry sequence that commenced late in 1936 and extended to 1945.

Prior to the formation of the NEM in 1998, electricity generated was on sold by State and ACT electricity utilities.  With commencement of the NEM, governments established Snowy Hydro Trading Pty Ltd., to trade the Scheme’s energy into the market independent of the electricity utilities.  On corporatisation Snowy Hydro Trading activities were taken over by Snowy Hydro Ltd.

Blog posts on Snowy Hydro can be accessed by scrolling here:

To summarize the posts so far:  In December I was provided with information suggesting Snowy Hydro was topping up the floods by making environmental flow releases.  Mr Charlton said these releases had stopped by Wednesday, December 8.  I was then provided with the operational plan for that Wednesday showing water releases from Lake Eucumbene i.e. that the Snowy Hydro was still topping up the floods on that day.  Snowy Hydro denied this was the actual operational plan but failed to provide an alternative.  I was then provided with a chart showing the drop in Lake Eucumbene dam levels to confirm the authenticity of the operational plan.  The operational plan and the dam level chart indicate that a significant quantity of water was released from Lake Eucumbene on December 8 which was during the flood crisis.

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

  1. Johnathan Wilkes January 6, 2011 at 8:29 pm #

    I was wrong in my assumption that this scheme was meant for preserving water
    for droughts.
    My mistake of thinking that politicians of past were wiser than what we are
    lumbered with now.
    Silly me.

  2. debbie January 6, 2011 at 9:55 pm #

    Good article from Max Talbot,
    I look forward to the rest.
    It seems that there used to be a sensible balance and “they met quarterly to make sure that there were no conflicts (potential or otherwise) between the release of water for irrigation and
    its release for energy production”.
    So what happened?

  3. Polyaulax January 6, 2011 at 11:24 pm #

    I look forward to the rest of this series.

    I’d suggest downloading the past three water years operational reports,and reading them in conjunction with the Water Operations Reference Report,also downloadable from the water resources page at the Snowy Hydro website.

    This will give background to operational conditions and legal obligations,as well as water stored and allocated. Of the past decade or so,only one year experienced natural inflows that exceeded the long term average for the scheme. This explains Eucumbene’s falling levels trend over most of that time. In the light of excellent recoveries in the levels of Tantangara and Jindabyne,a real question can be asked about why Lake Eucumbene is at a lower level at end 2010 than end 2009,after the very wet spring/early summer we have seen.

    Whatever the answer to that question,it must be judged in the light of some other significant differences between end 2010 and end 2009: at the close of 2010, a full Blowering Dam is carrying 1120GL more water than end 2009,and a full Hume Dam is carrying an extra 2160GL. Some of this is Snowy water,and it is not lost to irrigation needs of the next seasons. Also while Eucumbene is down perhaps 250GL on end 2009,a lot of this shortfall is made up by the gains in Jindabyne and Tantangara.

    Jennifer,you closed down the last Snowy thread on a somewhat acrimonious note,suggesting that Ian Mott and myself were blustering and implicitly misleading readers,all the while noting you possessed information that could cast more light on the situation. For my part I have simply used available real-time and historic information from the NSW Water Office,BOM and Snowy Hydro to quantify the rain and flood events and put them into a real timeline,and to put some bounds around quantities moving through the system to try and verify whether claims of exacerbation and irresponsibility were valid.

    I cannot find any evidence to support accusations of exacerbation in the Murrumbidgee,and in searching for that evidence I found that in the two earlier and higher floods in the Tumut Valley,water managers acted effectively to eliminate any contribution from Blowering. None of this is bluster,and can be checked by anyone so willing.

  4. Jennifer Marohasy January 8, 2011 at 2:44 pm #

    Poly, you continue to mislead readers, your comment that…
    “some of the water in Hume and Blowering is Snowy water and that it is not lost to irrigation” ….
    shows a lack of understanding, as any additional water in Hume and Blowering from Snowy increased the amount of water spilt – water that could have been stored in Eucumbene for future release when needed.

  5. Polyaulax January 8, 2011 at 6:19 pm #

    You’ve made a few serious charges against Snowy Hydro. To paraphrase,they may have exacerbated the floods,and their failure to bulk up Eucumbene is suspicious and possibly a betrayal of the spirit of this iconic scheme.

    To take these charges beyond the rhetorical,you need to provide and crunch a lot of numbers. You have not. All you have offered is a split 80 cumecs for one day,and a possible split 18 GL for five,in flood events that saw several thousand GL move down both rivers. Where is information about how much SH generation activities added to the inflows to Blowering in November and December,and how much hydro power output they would need to forgo to achieve a satisfactory outcome in your view? This is what it comes down to.

    Yet somehow I am misleading readers by sincerely attempting to fill this quantitative void with the information we can readily access. In the process I have learned a lot about the history and scale of this wet event,how it played out in the catchments and how it was managed for the last three or four months,and I hoped sharing it would be useful. I am not anxious to defend SH and even the NOW,but no one will examine their role dispassionately.

  6. debbie January 9, 2011 at 11:54 pm #

    Sorry Poly,
    As much as I absolutely respect your ability to process data I have to agree with Jen.
    You are using mountains of very impressive data but you seem to have missed the main point of this thread regarding SHL.
    As Jen points out, this could be construed as misleading.
    Honestly, as fascinating as you find calculating flood depths, widths, heights and times, it is not the main point and it never was.
    As Robert stated in an earlier post:
    “Who on this continent of Australia is allowed to knowingly waste 6000, 3000 or 1000 megalitres? And into someone’s flood?”
    It really doesn’t matter how much it was, although I admire your tenacity in trying to figure it out.
    This has been happening for months and there is something very wrong with the whole picture here.
    In the big picture it was way more than 6000ML
    There are some very serious questions that have not been answered.
    Surely you at least agree with that?

    Is it also true that you have not asked for the very specific information that Jennifer has?

    Considering how much you focus on the importance of factual and usable data, that seriously surprises and disappoints me.

  7. Polyaulax January 10, 2011 at 6:29 pm #

    Again,Deb,that is a retreat to allegations. “This has been happening for months…” What has been ‘happening for months’? Snowy Hydro generating power and honoring its water agreements under the license terms ? Have we discovered standard operating procedure?!

    It seems people are getting upset about a small amount of water that may have been stored rather used for generation. How much? 18-20GL? Should SH have been directed -can it be so directed?- to generate less or zero power over a certain period-forego revenue and perhaps weaken electricity supply security-for a month or more preceding the December flood in order to exclusively build Eucumbene’s storage? Why can’t Jen construct a case with the information she has? Because it tells us little?

    Meanwhile,thousands of gigalitres of water are in storage that were not there last summer,and Eucumbene gained 8% over Spring.

    I’ll point out again that,of the three floods[Sep,Oct,Dec] on the Tumut below Blowering,only the last had any water from the hydro scheme in it. Blowering was deliberately managed to absorb hydro and flood water from the upper catchment during the first two. Not a word of acknowledgement for good management in the media or on blog. And the first two floods were higher than December’s.

  8. Debbie January 11, 2011 at 5:46 pm #

    Please go back and check.
    The amounts of water missing that should be stored in Eucumbene right now is in the 1,000,000’s of mega litres. Actually if you count want went down Snowy as well they get into more than 1 Million
    Can’t find them? Why is that do you think?
    I have no wish to get into a battle of semantics with you but please you need to check.
    While you’re at it, please check the figures for this time last year compared to this year. Then check the inflow figures and then explain why Eucumbene is now emptier than it was last year.
    Can’t find the inflow figures? Why is that do you think?
    You can certainly check the lake levels.
    Remember that I have seen the graphs and the inflows are at their highest this century.
    You also need to carefully read Max’s article as it unfolds and understand how the proirities have been changed and there are some serious repercussions emerging because of this.
    I take your point about the other dams, but the issue is the “mother lode” has been emptied and the excuses and reasons are highly suspect.
    You may also like to check with someone what “forced generation” means before you make statements about what SHL does and doesn’t do with power generation. Max could explain it to you for sure. Why don’t you ask?
    The only reason I’m answering this is because you said “a small amount of water”. It was not a small amount of water and what’s more it is still being released on the Murray side into a system that doesn’t need it. The repercussions of this behaviour are quite scary.
    Also…did you ask Jennifer for that operational chart?
    Please check.
    Please also question why vital information to solve this puzzle and answer the questions is not available to the general public.

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