A massive expansion of the Snowy Hydro scheme has been officially approved in a bid to force energy prices down and make power more reliable.
with Prime Minister Scott Morrison on Tuesday visiting Tumut in southern NSW to announce the approval.
"Snowy 2.0 will inject the energy supply and reliability our electricity market needs, helping cut costs to families and businesses and cut Australia's emissions," Mr Morrison says.
Pumped hydro works by using cheap electricity - usually at night - to pump water back up a hill and into the dam, where it is stored until energy demands start to peak during the day.
Work on the expansion of the Snowy Hydro scheme has been given the all clear to begin. Source: AAP
Snowy Hydro's board approved the final investment on December 12, and the government is satisfied the project stacks up. Taxpayers will chip in $1.38 billion, with Snowy Hydro to fund the rest.
Energy Minister Angus Taylor says the government is confident it will be getting a good return on its investment and will release economic modelling as the project proceeds.
"We're very confident of the economic case," he told ABC Radio National on Tuesday.
When completed, the new project will increase generation capacity by 2000 megawatts and provide 175 hours of energy storage - enough to power 500,000 homes during peak times.
It will create up to 2400 jobs in construction and support up to 5000 direct and indirect jobs across the Snowy Mountains region.
The Snowy 2.0 proposal was one of former prime minister Malcolm Turnbull's pet projects, before he was dumped by his party for pushing for action on climate change.
The Snowy Hydro was a pet project of former PM Malcolm Turnbull - pictured at the Snowy Hydro Tumut 2 power station. Source: AAP
Mr Turnbull says he please to see the project given the green light, describing it as key to an e.
"As the cost of wind and especially solar becomes less with improved technology, storage is the key to reliability," he wrote on Twitter.
"And while batteries are improving rapidly, for large scale storage the best option is Pumped Hydro, like Snowy 2.0."
Mr Morrison gave a speech on Monday in which he promised to tackle climate change using the Emissions Reduction Fund set up under former prime minister Tony Abbott.
Prime Minister Scott Morrison announced the funding this week. Source: AAP
He committed $200 million a year for 10 years to ensure Australia meets the 2030 target of lowering emissions by 26 to 28 per cent on 2005 levels.
Mr Morrison also announced $56 million to kickstart a second electricity interconnector between Tasmania and Victoria.
The Marinus Link proposal could deliver up to 2500MW of renewable hydro power to Tasmania and Victoria, including 16 gigawatt hours of storage.
The prime minister has also flagged a future announcement about an electric vehicles strategy.
