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: http://jennifermarohasy.com/blog/tag/snowy-hydro/
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.