The Hon Chris Bowen MP, Minister for Climate Change and Energy
Senator the Hon Katy Gallagher, Minister for the Public Service
Snowy Hydro Ltd has today released updated advice on the cost and delivery schedule for the Snowy 2.0 project.
This follows an extensive reassessment process, initiated by the company in light of persistent and material cost pressures emanating from the project's original "design immaturity at FID".
The reassessment has found that the target cost-to-complete for Snowy 2.0 is now $22.2 billion with an allowance for $25 billion.
The project is now scheduled to be commissioned in late 2029.
This revised cost and delivery schedule has been driven by cost pressures in the construction sector and the significant geological challenges of the project, exacerbated by design immaturity when it was first announced by the former government.
Once completed, Snowy 2.0 will be an incredible national asset, supporting Australia's energy security, price stability and the transition to renewable energy.
An independent economic assessment conducted by GHD, also released today, finds Snowy 2.0 will inject around $18.3 billion into the Australian economy. By underpinning reliable energy supply, Snowy 2.0 will deliver widespread benefits to national and regional economies including reducing wholesale electricity costs by more than $7 billion over its first 50 years of operation.
The Government remains transparent about the pressures facing this project and securing the best possible outcome for taxpayers, energy consumers and the grid.
The former Coalition Government left behind a project facing major delays, rising costs and serious delivery risks. The initial $2 billion headline cost announced in 2017 had already risen to $6.1 billion by the final investment decision in December 2018. The former Minister for Energy, Angus Taylor, was aware of further Snowy 2.0 cost blowouts before the 2022 election, but chose not to disclose the situation to the Australian people.
Completing Snowy 2.0 remains the responsible course. With tunnelling now 65 per cent complete, compared with 19 per cent at cost reset in 2023, abandoning the project would undermine grid reliability, scrap 5,000 jobs and lead to higher bills. Once complete, the pumped hydro expansion of the Snowy Scheme will provide more than half of the total energy storage the grid needs by 2050, strengthening energy security and putting downwards pressure on energy prices.
By storing low-cost renewable energy when it is abundant and releasing it when needed, Snowy 2.0 will help limit wholesale price peaks and reduce exposure to expensive gas generation and ageing coal outages as well as inject $2.1bn in local investment in the region.
The Coalition itself said Snowy 2.0 was "critical to the security and stability" of the National Electricity Market and will "put downward pressure on wholesale electricity prices". Those facts have not changed.
We will consider how best to support Snowy Hydro to deliver value for the taxpayer and apply additional project oversight to ensure this happens on the road to completion and will make those announcements in due course.
