Snowy 2.0 Project Costs Surge to 25 Billion Dollars
The Australian government revealed the Snowy 2.0 pumped hydro project cost has surged to 25 billion dollars, with completion delayed until late 2029.
The estimated cost of the Snowy Hydro Limited pumped hydro project in Kosciuszko National Park has surged to between 22.2 billion and 25 billion dollars. This figure is approximately 12 times the original 2 billion dollar estimate provided by the Turnbull government in 2017. New projections indicate the project will not be fully commissioned until late 2029.
Energy Minister Chris Bowen and Finance Minister Katy Gallagher attributed the blowouts to design immaturity under the previous Coalition government, alongside geological challenges, labor cost increases, and productivity shortfalls. Technical failures, including a boring machine becoming wedged in rock and cost estimation errors by the principal contractor, Future Generation Joint Venture, further hindered progress. A June audit by the Australian National Audit Office found that the Commonwealth now bears most of the project's cost risk following a 2023 contract reset with contractor Webuild.
Snowy Hydro CEO Dennis Barnes defended the budget's 2.8 billion dollar contingency, citing the complexity of constructing 40 kilometers of tunnels. Despite the costs, the government maintains that completing the project is the only responsible course to ensure grid reliability and protect 5,000 jobs. Opposition energy spokesman Dan Tehan responded to the news by calling for Minister Bowen's resignation, arguing that such blowouts would result in the sacking of a corporate CEO.
