Budget Black Hole as Energy System Crumbles Under Labor
Joint media release with Ted O'Brien MP Shadow Minister for Climate Change and Energy
3 May 2023
Today's announcement that the Snowy 2.0 pumped hydro storage project will be delayed by up to two years and potentially require billions of dollars in additional funding is the latest development in Labor's energy crisis.
The Snowy 2.0 ‘mega battery’ was commissioned by the former Coalition Government to support an orderly transition of the national electricity market (NEM), which is now under threat.
Since Labor came to office, there have been reports of massive blow outs in both cost and the delivery timeframe.
The closure of Liddell, Eraring, Yallourn and Vale Point B Power Stations will carve a whopping 7.5GW hole into the NEM before the 2GW Snowy 2.0 project is now slated to be fully operational in December 2029.
Shadow Minister for Climate Change and Energy, Ted O’Brien said the further delays spelled disaster.
“The Albanese Labor Government has created an energy vacuum in Australia, with baseload power stations being ripped out of the grid without a replacement ready to go,” Mr O’Brien said.
“Australia’s energy reliability is under siege with rolling delays and blowouts under Labor including the all-important 660MW Kurri Kurri gas plant which will not provide power for a year later than scheduled in 2024.”
“Australians are already paying higher energy bills with the latest CPI data revealing that electricity costs are already up to 25% higher than they were less than a year ago.”
AEMO has warned of the growing likelihood of electricity blackouts in mainland states. When the Coalition left office, there was no forecast reliability gap.
In Government, the Coalition worked with energy providers like AGL to extend the life of critical power stations while replacements were built. This is exactly what Labor must now do, Mr O’Brien warned.
“The government must urgently enter discussions with Origin Energy to keep Eraring operating until replacement dispatchable capacity comes online,” Mr O’Brien said.
“Labor must immediately reinstate a technology agnostic capacity mechanism, work with Origin to extend the life of Eraring, scrap its uncommercial green hydrogen plan for Kurri Kurri and ensure Snowy 2.0 is operational as soon as possible.”
Shadow Finance Minister Senator Jane Hume, said the disclosure of these delays less than a week out from the Budget puts a new black hole in Labor’s Budget before it had even been released.
“Snowy Hydro has said that it expects more detail on the budget implications around July 2023, more than a month after the Labor Government delivers its Budget. The Budget will be out of date before it has even hit the printer.”
“Katy Gallagher needs to get on top of her portfolio and ensure that the financial implications of these delays to Snowy 2.0 are reflected in the Budget.”
“Chris Bowen and Katy Gallagher have questions to answer about when they knew about these delays, and why the budget implications for the project reset will only be released months after this announcement.
“This is a test for Katy Gallagher. After talking a big game about Budget transparency, will she ensure that the impact of these delays are included in her upcoming Budget, or not?
Despite promising to cut electricity bills by $275 a year, the Albanese Government has delivered the highest electricity prices on record.
On 1 July, electricity prices will rise further, increasing by up to 33 percent for households and small businesses.
Every day Labor is in power, Australian households and small business are worse off.