Minister, thanks for your time.
Thanks for having me, Leigh.
Why wasn't a cost benefit analysis done of Snowy 2.0 before it was commissioned?
Well… it has been done
which, I know, doesn't answer your question, but I've got a bunch of talking points to get through first.
I mean, we know that the benefits of Snowy 2.0 will be from [$]4.4 to 6.8 billion and […] Snowy will reduce volatility of wholesale electricity prices.
It will put downward pressure on prices […].
And what makes this possible […] is the record levels of investment […] in solar and wind, and Snowy works as a big battery.
But Minister, this analysis wasn't done before the Snowy scheme was announced. How is it responsible use of […] money […] to announce a massive infrastructure spend without doing a feasibility study first?
Leigh, we made our investment decision
to stick with Malcolm Turnbull's announcement, which he made in March 2017 before the feasibility study was conducted,
after we'd done a cost benefit, and after we'd done the feasibility work. Now the feasibility work was done in December 2017 […].
[…] By storing energy, [Snowy] can bring down the prices and […] reduce the volatility of those prices.
On that point, if Snowy 2.0 comes online in 2025, how much in percentage terms will the average household power bill go down by?
I have no idea. Dodge the first:
Well, it depends on the time of day and […] year but at peak times of year it can come down by thousands of dollars a megawatt hour.
And to put this again into perspective, we know that at peak times of…
But that— sorry to interrupt you […], I don't know what a megawatt hour is when I look at my power bill. I just want to know: by what percentage is my power bill going to come down by?
I have no idea. Dodge the second:
Well yeah the benefits across all Australians is [$]4.4 [billion], as I say $4.4 to $6.8 billion, and that's a very significant…
No but that doesn't mean anything to me, because my bill's in hundreds of dollars, so what does my bill go down by?
I have no idea. Dodge the third:
It depends on how much you're spending now but we're talking, uh you know, very… significant amounts for businesses, for industry and for households.
And no, I am unable to quantify "significant" because I am using it as a rhetorical device.
Why has Snowy 2.0 doubled in cost and blown out significantly in terms of time?
Well, it hasn't
but only if you ignore Malcolm Turnbull's initial quote of $2 billion and 4 years, which I sense is the whole point of your question.
Well, it has. Malcolm Turnbull said it was going to be 4 years originally?
Bugger.
The original feasibility… the feasibility study work was done in December 2017. The numbers were [$]3.8 to [$]4.5 billion and we're in line with those.
Of course, "in line" has a different meaning if we are referring to spending by Labor.
The commissioning will be done in 2024 to 2025, and they were numbers, they were times that were established during the feasibility work.
Gee, it's so convenient just ignoring Malcolm Turnbull's numbers eh?
Australians were originally told it would cost $2 billion, then less than a year later that doubled. Earlier this year a contract for part of it was signed for more than $5 billion.
Is there a limit to what the Government will chip in? Is it not a blank cheque because […] [it is] key policy and therefore it has to happen?
No, Leigh, the decision was made based on the feasibility study in December 2017.
They were the numbers that count, and the numbers are still in line with that feasibility study.
Since we are talking about the Coalition, "in line" means if you squint hard enough, they look the same. Never mind that $5 billion already exceeds the $4.5 billion quoted by the feasibility study.
And is there an upper limit to what the Government will chip in?
Well, we intend to achieve the outcomes of the feasibility study
but after all, that's intent, so the answer is 'no'.
That's the plan and I'm assured by the Snowy chief executive and board that we will achieve those outcomes.
The CEO of Snowy Hydro, Paul Broad, says that because of the amount of government money being spent, Australians are either going to have to pay for this through their taxes or through their bills. Which will it be?
Well, the truth of the matter is, it's going to reduce bills by $4.4 to $6.8 billion.
So does that mean that we'll be paying for it through our taxes?
And the reason… Well the rea… Well, no.
In other words, I am disagreeing with Paul Broad, whose assurances were enough to satisfy me a few moments ago regarding achieving outcomes of the feasibility study. And cue spiel about reducing volatility:
I mean, the reason there is an opportunity to deliver a better outcome for consumers is very simple.
Right now, Leigh, we are seeing huge volatility in electricity prices […].
[…]
But minister, we're talking about government spending of a massive scale […]. Where does the money come from? It's got to come from somewhere.
Well, the money comes from… the investment is being made by the Government—
Whoops, did I say "Government"? "Government" is a euphemism for "taxpayer".
$1.38 billion in equity investment […].
[…]
[…]
Minister, I'm sure you've got Cabinet tonight. Thank you very much for making time to squeeze us in.
Thanks for having me, Leigh.