This is my Senate Estimate session in December with the CEO of Snowy 2.0 and Minister Watt, where we witnessed a masterclass in buck-passing and dodging, when asked about the future of the Tomago aluminium smelter.
Tomago employs thousands of people both directly and indirectly. It relies on cheap coal power from the Eraring Power Station to reduce its production costs to compete with cheap Chinese aluminium.
With Eraring scheduled to close in 2028, Tomago has advised that the renewable power currently available for order is substantially more expensive, making the plant not economically viable.
The Albanese Government has held several press conferences in the Hunter region in the last few months, assuring locals that the government “has their backs” and that the power will come from firmed renewables from Snowy Hydro. Specifically, this extra power is intended to come from Snowy 2.0 upon its completion and from the new gas plant in Kurri Kurri. However, this solution will not work.
Tomago uses 8,400 GWh of power annually. Snowy Hydro will contribute 375 GWh, and the new Kurri Kurri gas plant 2,500 GWh, bringing Snowy Hydro’s total generation to 5,800 GWh. Even if all existing customers sourced their power elsewhere and Snowy sold Tomago every watt of power they had, it would still fall short of the required amount needed. Given that Eraring generates 14,000 GWh, the solution is obvious: Eraring must remain open.
When questioned on this, Snowy Hydro CEO Mr. Barnes did his best not to upset Minister Watt by deferring to the Department. The Department advised that these discussions “sensitive” and declined to provide further information.
Most alarming was the admission that Snowy 2.0 isn’t an energy provider, it’s more of an “insurance company,” designed to run only 10% of the time, with their power being used to backup the grid in case of an emergency.
If Snowy Hydro sold its entire power to keep Tomago operational, the grid will not have that emergency source of power, inevitably resulting in blackouts. This highlights the lie that Snowy Hydro can “save” Tomago.
The government claims to care about jobs in the Hunter Valley, yet when asked what the plan was to replace the baseload power being lost, they had nothing to say other than they were at the “sensitive stage of discussions.”
The net-zero transition is a disaster that is wrecking breadwinner jobs. One Nation will extend the life of Eraring until new baseload coal power can be built at Bayswater, followed by a refit of Eraring to ensure further operation.
— Senate Estimates | December 2025
Transcript
CHAIR: Senator Roberts.
Senator ROBERTS: Thank you for appearing again. I’ve got simple questions about Snowy. First, with reference to media reports on 24 November this year regarding a role for Snowy Hydro in saving the Tomago
aluminium smelter, the report states that Snowy Hydro will provide Tomago with electricity subsidised by the taxpayer from 2028. Are those plans advancing? How much power will be supplied, and how much will the subsidy cost taxpayers?
Mr Barnes: It’s always flattering to have the role of Snowy recognised, but that’s a question for the department. We’re not acting on that right now.
Senator ROBERTS: You can’t tell me about Tomago’s advancing?
Mr Barnes: No.
Senator ROBERTS: What about your role in that?
Mr Barnes: We’ve provided some limited advice to the department.
Mr Duggan: I answered this question earlier. The stage of discussions at the moment is sensitive from the point of view of commercial negotiations, so, in the interests of that, we’re not providing any more information at this stage around the process.
Senator ROBERTS: Okay. The next question is about reviewing Snowy Hydro’s generation capacity. I would have thought you were selling all the power you generate. How much spare capacity does Snowy Hydro have currently?
Mr Barnes: We currently have 5,500 megawatts of generation capacity.
Senator ROBERTS: That is 5.5 gigawatts.
Mr Barnes: Yes. We’re obviously building 2.86 gigawatts with Kurri Kurri and Snowy 2.0. We sell to multiple channels, whether it’s residential customers from our retail brands, large industrial customers or the
wholesale market more generally—our competitors and anyone who participates in that market. The contract duration varies, so we don’t necessarily have a 10-year home for all of our capacity, so our spare capacity does vary, but we are, of course, currently in the process of building 2.86 gigawatts, which we haven’t sold.
Senator ROBERTS: Thank you. In fiscal year 2024, Snowy Hydro generated 3,937 gigawatt-hours in total. Even if your gas plant, the Hunter power project, is fully online by 2028, that’s only another 2,900 gigawatt-hours. Snowy Hydro 2.0 is only another 375 gigawatt hours. They won’t be available in 2028; you just said that’s going to be finished at the end of 2028. Can you give me an honest assessment of how much power you will have available for Tomago in 2028?
Mr Barnes: I won’t reference it to Tomago, but—
Senator ROBERTS: How much is available?
Mr Barnes: To describe how Snowy Hydro works: we’re a provider of what you might call last-resort capacity. Our average capacity factor, or the amount of time our plant runs relative to its capacity, is only 10 per
cent of the time. We expect, for example, Kurri Kurri to run for less than 10 per cent of the time. So we’re not really an energy provider; the energy provision is from the solar and wind that we enable. We have now contracted more solar and wind than we will produce from the Snowy 1 hydro scheme.
Senator ROBERTS: You mean receive it?
Mr Barnes: That is to receive it and be able to sell to customers packaged as a firm supply. We’re not really an energy provider; we are the provider who’s there when, currently, a coal plant fails, the wind is not blowing or the sun’s not shining. Energy provision isn’t really our game. Being there when another plant isn’t available is really our game. We enable energy to come to market.
Senator ROBERTS: Thank you for being honest with me. Very few people will actually admit would you just admitted—that Snowy 2.0 is not an energy provider.
Mr Barnes: No, we act more like an insurance company.
Senator ROBERTS: Or a battery.
Mr Barnes: We back that insurance with physical assets.
Senator ROBERTS: Thank you. You have the generation capacity in the Snowy scheme, but you’re limited by water, and of course we need to balance water with real environmentalism—environmental needs for water as well. Minister, as coal comes out of the grid, will the government be forced to change the rules to allow more water for hydro and less for the environment?
Senator Watt: I don’t really think that’s a question in this outcome. I’ve only just arrived here, but I presume all those sorts of issues were canvassed with the department earlier in the day. If you’ve got questions for Snowy Hydro, now is probably the time to ask those, but those are much broader policy issues that the relevant officials aren’t here for.
Senator ROBERTS: Mr Barnes, your water need is one of the vulnerabilities of Snowy 2.0. The catchment area for the upper reservoir is very small. I know you’re going to recycle water, but nonetheless that surely must be a concern. I think someone identified it in the past as a concern that you will need to take water from other places, which means either farming or the environment.
Mr Barnes: Snowy Hydro is obviously subject to water regulation. We don’t make those rules, so we comply with those rules. The purpose of the Snowy scheme is to capture, store and release water to provide reliable
irrigation flows and support the electricity market. As you know, Snowy 2.0 is a recycling plan, so it doesn’t actually rely on those inflows. As I say, there are a couple of current reviews underway on the balance of environmental flows versus flows for irrigation and the electricity market, but we don’t make those. We are subject to water license compliance, which is the instrument that governs us 100 per cent each year.
Senator ROBERTS: I accept that you don’t govern the water requirements and that you’re governed by regulation, but you foresee any need for increases?
Mr Barnes: Again, it is not really a question for Snowy Hydro. We will be subject to whatever regulation is put in place.
Senator ROBERTS: That would tend to indicate that maybe Snowy 2.0 is not terribly secure.
Mr Barnes: Like I say, Snowy 2.0 is a recycling plant, so it doesn’t really rely on any changes to inflows or outflows from the scheme.
Senator ROBERTS: Minister, is the proposal to use Snowy Hydro to keep Tomago open complete nonsense?
Senator Watt: As you may be aware, I’ve been a little bit focused on some other matters over the last few days, involving EPBC reforms!
Senator DEAN SMITH: I thought that was last week!
Senator Watt: It was. I was on the job again on that today in Tasmania, as you may have seen. So I will ask Mr Barnes to say what he can about that matter. You might get better information out of him than you might out of me, but I’m not sure what he’s at liberty to discuss.
Mr Barnes: What is the question?
Senator ROBERTS: Is the proposal to use Snowy Hydro to keep Tomago open complete nonsense?
Mr Barnes: Again, it is not one for me to comment on. I think it’s a process for the department and the
government.
Senator ROBERTS: So Snowy Hydro can’t comment and the minister can’t comment?
Mr Duggan: I will repeat what I said earlier, which is that in earlier evidence we indicated that discussions with Tomago are ongoing. They’re through the industry department, not through this portfolio. We’re supporting them, but they are at a sensitive stage of discussions and therefore I wouldn’t feel at liberty to provide further information on the process, as that may upset those commercial discussions.
Senator ROBERTS: I will reiterate that Snowy Hydro 2.0 is only 375 gigawatt-hours and Snowy Hydro’s gas is almost half of Snowy Hydro’s generated power, so there seems to be not much room for error there.
Mr Duggan: This is, again, probably a question more for the industry department about those discussions with Tomago.
Senator Watt: We would love to have a chat with you about that later in the week.
Senator ROBERTS: Okay. The Eraring Power Station produced 14,000 gigawatt-hours in fiscal year 2023. Minister, will you take over Eraring, extend the life of Eraring and keep Tomago smelter open to save the thousands of jobs it supports at the smelter and in the Hunter?
Senator Watt: I’m not aware of any of those discussions, but, again, we’re here to answer questions about Snowy Hydro in this part of the program. I’m sure Minister Bowen will have more to say about that in coming—
Senator ROBERTS: I’m very concerned about the jobs in the Hunter though.
Senator Watt: As are we. You will be aware of the work that this Labor government has done to protect those jobs, as has the New South Wales Labor government.
Senator ROBERTS: And threatening coal.
Senator Watt: Well, it is a coal-fired power station that is coming to the end of its life whether we like it or
not.
Senator ROBERTS: It was brought forward, and now it’s been shoved back again. On the night of the election win in New South Wales state election in 2023, the incoming energy minister dropped a very big hint that they wanted to prolong the life of Eraring, and now they aren’t doing that.
Senator Watt: You’re talking about decisions of the New South Wales government. I couldn’t comment on that.
Senator ROBERTS: Your Labor government. Thank you.


