Snowy 2.0 Cost Target Rises to AUD 22.2 Billion, Completion Late 2029

Snowy Hydro now puts the target cost to complete Snowy 2.0 at AUD 22.2 billion, with an allowance for a cost scenario of AUD 25 billion, after a reassessment by principal contractor Future Generation Joint Venture (FGJV), the company said in a statement on Oct. 22. The new target completion date for the Australian pumped-hydro project is late 2029.

The project is rated at 2.2 GW and 350 GWh of storage. That is 2.2 GW of output power and 350 GWh of stored energy, two separate measures. The cost was first put at AUD 2 billion in early 2017, then AUD 3.8 billion to AUD 4.5 billion later that year, AUD 6.1 billion in 2018 and AUD 12 billion in 2023, according to ESS News.

Why the Snowy 2.0 Estimate Rose

Snowy Hydro said the higher cost scenario reflects the project's uniqueness, risk and technical complexity, as well as FGJV's cost estimation challenges. ESS News, reporting on the update, said it largely blames FGJV underestimating the delivery scope, including cost and planning underperformance, and missed productivity targets because of construction complexity. It also cites a design revamp after detailed technical analysis, and global cost increases for equipment, services and labor beyond the allowances made at the 2023 contract reset.

Snowy Hydro chief executive Dennis Barnes called the increase disappointing. He said moving off a fixed-price contract had protected the project from an even greater rise, and that under such a contract the project would likely have been stopped again under the weight of billions of dollars of contractor claims. The 2023 reset directed FGJV to set up a project control office, now operational, that uses data and analytics to spot risks early.

Snowy Hydro said the AUD 22.2 billion target is not the amount taxpayers will have to fund. At the previous AUD 12 billion estimate, around one-third, or AUD 4 billion, was Commonwealth investment that the company did not need to repay; most of the rest came from government and bank loans that Snowy Hydro must repay with interest, plus its own cash flows. Work is under way on the Commonwealth's preferred capital strategy at the new cost, the company said.

Firm Power Value and Construction Progress

Snowy 2.0 is meant to supply long-duration storage: Barnes describes it as the grid's insurance against multi-day wind and solar droughts. Snowy Hydro says the storage equals about 26 million home batteries, or enough to power 3 million homes for a week. Those are Snowy Hydro's own figures. For anyone planning large new loads such as data centers in the Australian grid, a firm storage source whose target cost is now more than ten times its 2017 estimate, and is still years from completion, is a delivery risk to watch. Voltgrid News reported earlier on BNEF's global energy storage forecast.

Cavern excavation is 90% complete and machine tunneling 65% complete, according to ESS News. The project, with more than 5,000 workers, is moving to physical assembly of the underground power station. All six reversible turbines, built by Voith Hydro of Germany with bespoke components fabricated in Shanghai, have arrived in Australia.

The next phase covers inlet valves, spiral casings and high-voltage transformers weighing more than 400 metric tons each. The underground powerhouse is a network of caverns about 1 km below ground, which Snowy Hydro estimates will last 150 years.

What Is Not Confirmed Yet

ESS News gave the low end of the range as AUD 22.5 billion; Snowy Hydro's own statement says AUD 22.2 billion, and this article uses the company's figure. The AUD 25 billion figure is an allowed cost scenario, not the target. How the added cost will be funded is still open, since the Commonwealth's capital strategy at the new cost is not yet set. Late 2029 is a target completion date, not a delivered result, and the earlier estimates show how far past targets have moved.