Snowy 2.0 cost estimate rises to AUD 12 billion from AUD 2 billion since 2017

Australia's Snowy 2.0 pumped-storage hydroelectricity project was initially estimated to cost AUD 2 billion when announced in early 2017. The estimate was revised to AUD 6.1 billion in 2018, then to AUD 12 billion in 2023.

The update attributes the cost increase largely to the Future Generation Joint Venture (FGJV) underestimating the delivery scope, including cost and planning underperformance. It also cites the contractor's failure to meet productivity targets because of construction complexities. A design revamp involving detailed technical analysis was named as a further contributor. The update points as well to global increases in equipment, services and labor costs that exceeded allowances made at the 2023 contract reset.

Snowy Hydro formally instructed FGJV in late 2025 to carry out a line-by-line reforecast of the project's construction program and costs. FGJV was directed to set up a project control office, now operational, that uses enhanced data and analytics to drive productivity and identify emerging risks early.

Snowy Hydro CEO Dennis Barnes said the project is no longer on a fixed-price contract and is no longer exposed to billions of dollars in claims from the contractor.

The project is rated at 2.2 GW and 350 GWh. Cavern excavation is 90% complete and machine tunneling is 65% complete as the work transitions to physical assembly of the underground power station. Commissioning is expected in 2029.

Snowy Hydro said it is working closely with its shareholder, the federal government, to develop a capital structure to support the increase in costs and maintain its target credit rating of BBB+.