The Albanese government has defended the project's continued value, while the opposition has called for the energy minister's resignation over the latest blowout.
Snowy Hydro chief executive Dennis Barnes said the cost increase was “incredibly disappointing” but that the project was now in its “strongest position yet”. He attributed the blowout primarily to “design immaturity”, with insufficient planning work obscuring the true geotechnical complexity when the project was first conceived. Mr Barnes noted that 65 per cent of machine tunnelling and 90 per cent of cavern excavation had now been completed, with work to build the underground power station underway. However, he could not rule out further cost increases beyond the new targets, saying “there’s never any guarantees with mega projects”.
In a joint statement, Energy Minister Chris Bowen and Finance Minister Katy Gallagher pointed blame at the previous Coalition government, arguing the project had been signed off with underprepared plans. “The government remains transparent about the pressures facing this project and securing the best possible outcome for taxpayers, energy consumers and the grid,” they said. They cited an independent economic assessment that found Snowy 2.0 would improve the availability of low-cost renewable energy and limit wholesale power price spikes.
Opposition energy spokesman Dan Tehan called on Mr Bowen to apologise to taxpayers and said he should resign or be removed. “If the CEO of a company oversaw such blowouts, the board would have no choice but to sack him – Anthony Albanese should do the same to Chris Bowen,” he said.
Alongside the cost review, Snowy Hydro released an economic study by engineering consultant GHD that found the project would contribute $18 billion to Australia’s economy during delivery and reduce wholesale electricity costs by more than $7 billion by 2075.
The project, which involves digging 27 kilometres of tunnels beneath Kosciuszko National Park, is designed as a giant battery using pumped hydro to store energy from wind and solar and release it during demand peaks. It has a capacity of 2200 megawatts and enough storage to power three million homes for a week. Despite the setbacks, Mr Barnes said Snowy 2.0’s “massive, long-duration storage” was essential for grid reliability as ageing coal-fired power stations retire.