Snowy 2.0 Project Blows Past Budget, Daily Costs Exceed $3 Million

Tunnelling machines have advanced on Australia's Snowy 2.0 project, moving the nation's most expensive energy initiative closer to completion. However, significant doubts persist about whether the project will ever justify its escalating costs. Located in NSW's Kosciuszko National Park, the project is now seven years behind its original schedule.

What began as a $2 billion budget has ballooned, with recent estimates from Snowy Hydro placing the cost at $12 billion. This means the project has been burning through approximately $3 million per day. Snowy Hydro, a government-owned entity, has acknowledged that the final price tag will be considerably higher than current projections.

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Like most mega-projects in Australia and globally, Snowy 2.0's cost has increased; Snowy 2.0's scale and uniqueness have compounded the increase.

Adding to the controversy are ongoing safety concerns and the revelation that executives collected over $1.2 million in bonuses, even as the project missed financial targets. Snowy Hydro CEO Dennis Barnes acknowledged the project's difficulties, attributing rising costs to its "unprecedented scale and complexity." He emphasized the project's importance, suggesting that public frustration is amplified by its critical role.

Announced in 2017, Snowy 2.0 aims to expand the existing Snowy Mountains hydro-electric scheme by connecting two reservoirs via a 27-kilometre underground tunnel. It is designed to function as a giant battery, storing excess wind and solar energy by pumping water uphill and releasing it to generate electricity when demand surges. Upon completion, it is expected to produce 2.2 gigawatts of power, enough to power 3 million homes for a week. However, early studies indicated cost overruns, and the federal government acquired full ownership in 2018.

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I suspect the degree of frustration is amplified because people understand just how important this project is.