July 19, 2024 [Chem Analyst]- Snowy Hydro has signed a 25-year gas storage agreement with Lochard Energy at the Iona underground gas storage facility, aimed at bolstering support for Snowy Hydro’s gas-fired generation fleet.

Australia’s energy market is undergoing substantial transformation with the increasing adoption of renewables and the gradual decommissioning of coal-fired assets. Snowy Hydro plays a critical role in addressing intermittency within the National Electricity Market (NEM) through its array of power stations, including the iconic Snowy Scheme.

The extended Lochard storage agreement enables Snowy Hydro to deploy stored gas as needed to power its gas-fired stations.

According to Snowy Hydro CEO Dennis Barnes, ensuring reliability and security of supply is integral to how Snowy Hydro manages, maintains, and enhances its critical national infrastructure.

“Snowy Hydro’s portfolio of hydro, pumping, and gas-fired power stations plays a crucial role in integrating more renewables into the grid by stabilizing intermittent generation sources and ensuring reliable power supply. The agreement with Lochard Energy for gas storage will bolster the operation of our gas-fired power stations in Victoria.”

Tim Jessen, CEO of Lochard, expressed enthusiasm about deepening Lochard’s partnership with Snowy Hydro through the newly signed Gas Storage Services Agreement.

“This significant agreement will support Lochard’s Heytesbury Underground Gas Storage project, enabling us to expand the Iona Gas Storage Facility. This expansion will further enhance our ability to deliver essential energy storage services in Victoria.”

Gas storage plays a critical role in ensuring the availability of gas during peak electricity demand in seasonal markets, supplying gas to peak power generators such as Snowy Hydro, and maintaining supply security in case of disruptions.

Snowy Hydro owns and manages three strategically positioned gas-fired power stations in Victoria’s LaTrobe Valley and Laverton, as well as in Colongra, NSW, with a combined current generating capacity of 1,290 MW. Additionally, Snowy Hydro is in the process of constructing a 660 MW gas-fired power station in Kurri Kurri, located in the Hunter Valley.

The gas storage agreement with Lochard Energy is scheduled to begin in January 2028.

Throughout the last 75 years, Snowy Hydro has adapted to the evolving energy market, establishing itself as a prominent integrated energy provider in Australia. The company’s mission is to safeguard energy security, facilitate the transition to renewable sources, and enhance competition in energy markets. Snowy Hydro generates electricity critical to maintaining the stability and dependability of the National Electricity Market, offers price risk management solutions to wholesale customers, and supplies energy to residential and commercial establishments, ensuring uninterrupted service. Simply put, Snowy Hydro is dedicated to keeping the lights on.

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