Snowy Hydro 2.0 Cost Blowout: $25bn Price Tag and 2029 Delay 2026

Snowy Hydro 2.0, Australia’s flagship renewable energy project, has blown out to as much as $25 billion, 12 times its original $2 billion price tag. The long-delayed pumped hydro scheme will now not be fully commissioned until 2029, according to new projections released by Snowy Hydro on Thursday night.

The project, first touted by the Turnbull government in 2017, has been beset by technical challenges, cost overruns, and delays. The latest reset reveals the cost has risen from almost $13 billion in 2023 to at least $22.2 billion, with contingency for a further increase to $25 billion.

What happened: cost blowout and delay

Snowy Hydro 2.0 is a pumped hydro project in Kosciuszko National Park that aims to store renewable energy by pumping water uphill when electricity is cheap and releasing it when demand is high. It is considered critical to Australia’s transition to a low-emissions grid.

But the project has been plagued by problems. A specialist boring machine became bogged and wedged in hard rock, causing major delays. The unique nature of the project, significant risk, and technical complexity have all been blamed for the extraordinary cost overruns.

Despite the setbacks, machine tunnelling is now 65% complete, and major excavations are in their final stages. Work on the new underground power station is under way, with about 5,000 people employed on the project.

Why it matters: taxpayers and energy transition

The cost blowout means taxpayers will likely foot more of the bill. The Albanese government plans to announce additional project oversight and financing structures in coming weeks, with another injection of taxpayer funds expected, along with possible private financing components.

The delay also affects Australia’s renewable energy targets. Snowy 2.0 was meant to provide dispatchable storage to support the grid as coal-fired power stations retire. With completion now pushed to 2029, the grid may face tighter supply margins. The background to this story is set out in Victoria's Construction Scandal: Corruption and Cost Overruns Thr. A related thread runs through Renewable Energy Support Drops Due to Organized Campaigns. Earlier coverage in Australia's Renewable Energy Transition: Meeting the 2030 Target shows how the argument developed.

Key takeaways

• Cost has risen from $2bn to up to $25bn, a 12-fold increase.
• Completion delayed from 2028 to 2029.
• Machine tunnelling 65% complete; 5,000 workers employed.
• Government to announce new oversight and financing, with more taxpayer funds expected.
• Project critical for renewable energy storage but now more expensive and later.

Snowy Hydro 2.0: before and after

What to watch next

The government’s announcement on oversight and financing will be closely watched. Any further cost increases or delays will intensify scrutiny of the project’s management and the government’s energy policy. A closer look at the same subject appears in Albanese Eases AI Datacentre Renewable Energy Mandate. Anyone following the wider picture can start with Renewable Energy: A Magical Formula That's Actually Possible. The same theme surfaces in Renewable Energy Quiz: Test Your Knowledge Today, which takes a different angle.

Snowy Hydro CEO Dennis Barnes said the situation “could have been worse,” according to reports. But with costs now 12 times the original estimate, the project remains a lightning rod for debate over infrastructure delivery in Australia. Context on how this played out before sits in Home Renewable Energy Installations Surge in Britain: What's.

FAQ

The Snowy Hydro 2.0 saga is a reminder of the risks and costs of major infrastructure projects. As the government prepares to announce new financing arrangements, the focus will be on whether the project can be delivered on time and on budget from here. For a lighter take on another high-stakes drama, see The Celebrity Traitors: Has Richard E Grant Blown.