16/03/2017 8:44 AM AEDT | Updated 16/03/2017 10:38 AM AEDT

$2 Billion Plan For Snowy Hydro Scheme To Fix Energy Issues

Malcolm Turnbull looks to the past to secure the future.

Prime Minister Malcolm Turnbull will announce an audacious plan to expand the famous Snowy Hydro scheme to build "Australia's biggest battery" as a fix for Australia's energy issues.

The expansion of the hydroelectricity generation facility in the Kosciuszko National Park is expected to generate enough additional energy to power half a million homes. The government says the new plan would increase the 4100 megawatt capacity of the plant by up to 50 per cent.

Turnbull will visit the Snowy Hydro plant at Tumut, west of Canberra, on Thursday morning to announce the expansion. The plan is unexpected, coming in the midst of a so-called "energy crisis" in Australia which has seen ongoing power supply issues in South Australia, fears of rising energy bills, and fierce debate over Australia's renewable energy target and the power generation mix.

The government has been talking up coal, as well as floating proposals around natural gas and even nuclear energy, while Labor and the Greens have been pushing for more investment in solar and wind. Even Elon Musk and his Tesla batteries got in on the act. Hydroelectricity has not rated a mention in any public discussion or debate, until today.

Energy minister Josh Frydenberg told ABC TV the plan was "a game-changer for our energy markets".

"It is a very significant and a complex project, which is why we engaged [Australian Renewable Energy Agency], together with Snowy Hydro to see how we can build the 27km of tunnels between two reservoirs to create Australia's biggest battery," he said.

Paul Broad, the managing director and CEO of Snowy Hydro, told RN radio it "fulfils a dream of our forefathers".

"This will put 50 percent more capacity into the market from Snowy and continues the decarbonising of the economy," Broad said.

"We have two big dams, 680 metres apart, so effectively in off-peak time you pump water up the hill and when demand is high you run it back down the hill and through a major generator."

He said there was "a fair bit of work to be done" in upgrading the plant but backed Snowy to deliver enough energy to ease Australia's energy issues, which have included blackouts in some states and fears of rising energy bills.

"On February 10, when demand was very high, it was effectively Snowy keeping the lights on in NSW... this will keep the lights on in both NSW and Victoria."

However, despite the ambitious plan and the promised benefits, it seems not everyone got the message. The Snowy Hydro scheme spans locations in NSW and Victoria, but it seems someone forgot to inform the Victorian government.