Snowy Hydro 2.0 project costs rise to $25 billion

A comprehensive cost reassessment of the Snowy Hydro 2.0 pumped-hydro project indicates the total cost could reach up to $25 billion, including a $3 billion buffer. The updated target cost to complete the project is set at $22.2 billion. This represents a significant increase from the original $2 billion estimate provided in 2017 and the $12 billion estimate revised in 2023.

In addition to the budget blowout, the project's completion date has been pushed back to late 2029. Snowy Hydro CEO Dennis Barnes attributed the rising costs to the project's inherent complexity, design immaturity, and productivity underperformance. The principal contractor, Future Generation Joint Venture (FGJV), also cited adverse geological and hydrogeological conditions, such as unexpected groundwater inflows and variations in rock strength, as factors that slowed tunneling progress.

Despite the cost increases, the Australian government and Snowy Hydro maintain that completing the project is essential for grid reliability and the transition to renewable energy. Proponents argue the scheme will act as a massive rechargeable battery to support wind and solar power, potentially reducing wholesale electricity prices over the long term.