Essay by Eric Worrall
A billion here, a billion there, soon you’re talking about real money.
Snowy Hydro 2.0 flags another cost blowout with $12bn price tag now considered unachievable
Pumped hydro project in Kosciuszko national park is 67% complete, but supply chain cost increases and issues with a borer have caused cost overrun
Tom McIlroy Political editorFri 3 Oct 2025 12.24 AEST
Snowy Hydro is preparing for another significant cost overrun on the massive Snowy 2.0 project in the Kosciuszko national park, with a line-by-line reassessment ordered from contractors on Friday.
The giant pumped hydro project, first touted by the Turnbull government in 2017 as costing $2bn, was later revised to a cost of $5.9bn. Escalating to almost $13bn in 2023, construction is due to be completed by the end of 2028.
The Snowy Hydro chief executive, Dennis Barnes, said the latest cost assessment was deemed necessary due to significant supply chain price increases, including related to an underground power station, as well as delays from stoppages in 2024 with a major tunnel boring machine. He said the cost of adding a fourth boring machine could not be covered within the most recent project price tag.
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“We have gradually come to the realisation, and then quickly come to the realisation that we’re not going to achieve the schedule at target cost of $12bn,” Barnes said.
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Read more: https://www.theguardian.com/environment/2025/oct/03/snowy-hydro-20-flags-another-cost-blowout-with-12bn-price-tag-now-considered-unachievable
Even if the project is completed, it will not help make green energy economical.
The snowy 2 project will be a disappointment, even if the project is completed and works as expected. The original 2017 feasibility study estimated round trip electricity losses are at least 33%, even without transmission losses, which adds 1 / 0.67 = 49% to the cost of already expensive renewable energy. Since the intended purpose of Snowy 2, amongst other things, is to time shift solar energy output, this 49% more expensive renewable energy will be loaded onto the peak demand bills of ordinary households.
And let’s not forget, that feasibility study also gave us a cost estimate of $3.8 – $4.5 billion. If the 2017 energy efficiency estimates are as shaky as the 2017 cost estimates, the 49% increase in the cost of renewable energy pumped through the hydro scheme could be an underestimate.
And looming over all this is the $12 billion + capital cost and maintenance cost of the project, which will be paid for by taxpayers one way or another – either hidden in tax receipts, or piled onto energy bills.
Snowy 2 is the fever dream of people desperate to make their unaffordable Net Zero dreams succeed, but in practice is turning out to be as useless as every other attempt to make renewable energy work.
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