Snowy Hydro has directed principal contractor Future Generation Joint Venture (FGJV) to carry out a comprehensive cost reassessment of the Snowy 2.0 pumped hydro project. The review will take up to nine months and will be verified by independent construction cost experts. The project remains on schedule for completion in December 2028 and is currently 67% complete.

Snowy Hydro said the reassessment is necessary due to material cost pressures and current market conditions affecting major infrastructure projects.

CEO Dennis Barnes said Snowy 2.0 has continued to make steady progress since the 2023 project reset: “Despite disruption, including work stoppages due to safety concerns and continuing challenges with geology, we’ve been able to recover that time and get us to where we need to be in terms of schedule.

“The reset was about getting Snowy 2.0 moving again by creating a more collaborative relationship with the principal contractor and achieving safe progress. We’ve done both, but the productivity uplift hasn’t been to the degree we needed,” Barnes said.

Average monthly delivery has almost doubled, from 0.57% to 0.91%, with 0.98% achieved in August 2025.

Snowy Hydro identified three main factors contributing to current cost pressures:

  • Productivity challenges: While productivity has improved since 2023, delays from TBM stoppages in 2024, safety-related work suspensions and underperformance against productivity targets continue to affect costs.
  • Geotechnical conditions: A fourth tunnel boring machine will be deployed to manage difficult geology through the Long Plain Fault Zone. The associated costs were initially expected to be absorbed within the project budget but can no longer be accommodated.
  • Supply chain increases: FGJV has reported unforeseen cost increases for specialised equipment and offshore procurements, including major components for the underground power station.

Barnes said that while the cost reassessment is disappointing, Snowy 2.0 remains critical to Australia’s future energy system.

“Snowy 2.0 will be a cornerstone of Australia’s transition to renewable energy, providing more than half of the long-duration storage the grid needs by 2050,” he said. “It will enable the introduction of more wind and solar by acting like a giant battery, storing and delivering enough excess energy to power around 3 million homes for a week.

“Snowy 2.0 is being built to operate for 150 years. It is as important to Australia now as the original Snowy Scheme was decades ago. Like the original scheme, which still helps underpin electricity reliability today, the benefits of Snowy 2.0 will be felt for generations.”