"The project has zero chance of making money solely as merchant plant – that is, buying electricity out of the market at off-peak, pumping it 27km uphill at 70 per cent round trip efficiency, and then selling it at peak prices. The project will be able to earn some revenue doing that, but 2000MW is a lot of power and obviously only a small fraction of the storage could be used on any one day. Just to cover the round trip efficiency requires off-peak prices to be, say, 30 per cent less than peak prices. Snowy will certainly have a strong upwards influence on off-peak prices and negative downwards push on peak prices if it was operating on a regular basis."
