Snowy Hydro head Paul Broad has “offered his resignation” according to a statement from the government-owned enterprise, leaving the $5 billion revamp of the iconic infrastructure project leaderless mid-build.
A former head of Infrastructure New South Wales, Broad has led Snowy Hydro since 2013 and was instrumental in its resurrection as a government-owned, clean energy asset that would used renewables-fuelled pumped hydro to create dispatchable power to offset peak demands on the grid.
A trophy project of former prime minister Malcolm Turnbull, Snowy 2.0 rankled many hard-liners in the Coalition because it was seen to be conceding to pressure from climate activists and a renewables industry less reliant on traditional fossil fuel sources.
The project was also on the nose with Labor because it potentially gave the Coalition a progressive policy leg-up before the election in the once bell-weather seat of Eden Monaro that has oscillated between parties after being held for more than a decade by Liberal Gary Nairn in Howard era.
Snowy Hydro’s rates and bidding into the National Electricity Market (NEM) have been a recent source of antagonism between traditional generators amid accusations Snowy hoarded supply to ramp prices and profiteer from supply shortfalls as ageing coal plants shuttered or plain broke down.
However the challenge for Snowy 1.0 is that without the green energy refill capability Snowy 2.0 will bring, it has finite capacity in its dams to fulfil growing peak demands and shortfalls and thus sells at the highest price it can get.
The problem is that as coal generators leave the market, and the local price of gas soars because of export demand and a lack of sovereign reservation, Snowy’s premium on-demand price accounts for more of the market than before, elevating prices.
Snowy Hydro was effusive in its praise for Broad in its announcement of his apparent departure.
“Snowy 2.0 is a nation-defining and world-leading infrastructure project. It will underpin the transition to a decarbonised National Electricity Market and now employs more than 2,000 people, generating huge economic uplift in the Snowy Mountains,” the company said in a statement.
“Under Paul’s leadership, the first Snowy Hydro renewable energy procurement program began in 2018 and has grown to encompass 12 contracts with wind and solar projects totalling 1.3 gigawatts of energy generation.
“The Snowy Board will now commence a process to identify new leadership. Roger Whitby, Chief Operating Officer, will lead the organisation on an interim basis, with support from Paul to facilitate a smooth transition.”
What Labor’s plans are for Snowy are still a little unclear, although the chances of the federally-owned power generation asset being sold off are remote to non-existent. A vexing optical problem for the government is that it becomes the beneficiary of Snowy’s higher profits.
The Howard government had initially planned to relinquish its stake in the generator in 2006, a move scuttled by then member for Eden Monaro Gary Nairn as far too politically risky in an electorate where thousands of jobs were potentially at risk.
The now infamous photo of John Howard in a Socceroos tracksuit leaping jubilantly out of his chair was the night that deal was sealed, with a more naturally composed Gary Nairn sitting off to the left, and Senator David Fawcett to the right.
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