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↑Part of: Snowy Hydro says project could reach $25 billion as completion slips to 2029
Business · Asia Pacific

Snowy 2.0 cost estimate reaches $22.2b, with $25b possible in NSW

Snowy Hydro Limited raised its estimated cost for Snowy 2.0 to $22.2 billion, with a contingency buffer putting the potential total at $25 billion. The project is now expected to be completed in late 2029.

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Updat3 graphic: Snowy Hydro Limited
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What happened

Key facts

  • A contingency buffer could bring Snowy 2.0’s potential cost to $25 billion (per The Sydney Morning Herald).
  • Snowy 2.0 is a 2200-megawatt pumped hydro storage project in the Snowy Mountains of NSW (per The Sydney Morning Herald).
  • Snowy 2.0’s completion is projected for late 2029 (per The Sydney Morning Herald).
  • Snowy 2.0 was conceived in 2017, when Malcolm Turnbull estimated it could be built for $2 billion in four years (per The Sydney Morning Herald).
  • At final investment approval in 2018, Snowy 2.0’s estimated cost had risen to nearly $6 billion (per The Sydney Morning Herald).
  • Snowy Hydro chief executive Dennis Barnes called the cost increase “incredibly disappointing.” (per The Sydney Morning Herald).
  • Dennis Barnes said Snowy 2.0 alone would provide more than half of the grid’s energy storage needs by 2050 (per The Sydney Morning Herald).

The brief

Snowy Hydro Limited has lifted the estimated cost of Snowy 2.0 to $22.2 billion, while a contingency buffer could take the project’s potential price tag to $25 billion. The Sydney Morning Herald reported the revised figures in updated advice from the company and said completion is now projected for late 2029.

The new estimate marks a sharp rise from the previous $12 billion figure. Snowy 2.0 is a 2200-megawatt pumped hydro storage project in the Snowy Mountains of NSW. Its revised cost and schedule place both the projected expenditure and completion date at the centre of the latest update. The project’s cost has increased over its development.

It was conceived in 2017, when Malcolm Turnbull estimated it could be built for $2 billion in four years. By final investment approval in 2018, the estimate had reached nearly $6 billion. The Sydney Morning Herald described the latest increase as a setback for the renewable energy development.

Snowy Hydro chief executive Dennis Barnes called the latest cost rise “incredibly disappointing.” He argued that the project’s long-term contribution to Australia’s energy reliability remained strong, saying its storage capacity would exceed half of what the grid needs by 2050.

Barnes also characterized Snowy 2.0’s long-duration storage as protection for the electricity system during multi-day periods of low wind and solar generation. He said it could help prevent blackouts and restrain price spikes that might otherwise reach household electricity bills. Reuters separately published a headline estimating the Snowy Hydro project’s cost at $18 billion.

That figure differs from the $22.2 billion estimate and $25 billion potential total reported by the Sydney Morning Herald; the Reuters headline does not specify a contingency figure. The project’s updated cost, contingency and late-2029 completion projection are the central figures in the company advice described by the newspaper.

Why it matters

  • The potential project cost is $25 billion including contingency, compared with the current $22.2 billion estimate.
  • Snowy Hydro chief executive Dennis Barnes said Snowy 2.0’s storage would supply more than half of the grid’s energy storage needs by 2050.
  • Barnes said the project’s storage could help prevent blackouts and limit price spikes reaching household electricity bills.

What to watch next

  • Whether Snowy Hydro’s projected late-2029 completion date changes.
  • Whether the potential $25 billion cost, including contingency, is reached or revised.
  • Whether Snowy Hydro’s stated estimate of the project’s contribution to grid storage by 2050 changes.

How it's being covered

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2 source articles · 2 unique outlets
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Where the outlets are based: Asia 50% · Global 50%
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Where the outlets covering this story are based.
2 unique outletsDominant coverage: Asia
Limited coverage
  • Coverage is currently limited to 2 outlets.
How we measure coverage

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Timeline

Developments from this story's sources, dated background we compiled and fact-checked, and our earlier coverage. Each row says which.
  1. Snowy 2.0 builds on the Snowy Mountains Hydro-Electric Scheme, whose construction began in 1949 under the federally established Snowy Mountains Hydro-Electric Authority.
    Background · from our historical context
  2. The Snowy Mountains Scheme was completed.
    Background · compiled and fact-checked by Updat3
  3. The original scheme’s dams, tunnels and power stations were developed over decades, with the authority formally transferred to Snowy Hydro in 2002.
    Background · from our historical context
  4. The project was announced by Prime Minister Malcolm Turnbull in March 2017 as a 2,000-megawatt expansion of the Snowy Mountains Scheme, intended to store and dispatch renewable electricity using pumped hydro.
    Background · from our historical context
  5. Snowy Hydro approved the final investment decision for Snowy 2.0.
    Background · compiled and fact-checked by Updat3
  6. Construction began on Snowy 2.0.
    Background · compiled and fact-checked by Updat3

How we got here

In August 2023, Snowy Hydro revised Snowy 2.0’s estimated cost to about $12 billion and pushed its expected completion to 2028, after reporting delays and construction challenges. That estimate followed the project’s 2018 final investment approval, when the forecast had already climbed from its original $2 billion.

The project was announced by Prime Minister Malcolm Turnbull in March 2017 as a 2,000-megawatt expansion of the Snowy Mountains Scheme, intended to store and dispatch renewable electricity using pumped hydro. At the time, Turnbull said it could be built in four years for $2 billion; the approved design later specified 2,200 megawatts.

Original sources

1 of 2 articles · Asia · Show all

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