“Very disappointing”: Snowy confirms pumped hydro costs double again to a possible $25bn, hit with more delays

Snowy Hydro has doubled its cost estimate for Snowy 2.0 to a target of $22.2 billion, with an allowance reaching $25 billion, and delayed full commissioning to the end of 2029. The project was reset at $12 billion in 2023. Chief executive Dennis Barnes attributed the increase to earlier design immaturity, but the company has provided no updated net present value figure to justify continued investment at the new cost. The project's economic case, Barnes said, will be detailed in the annual report.

Where this fits

Snowy 2.0 embodies the hidden cost of a renewables-dependent grid. Pumped hydro is essential firming for weather-dependent solar and wind, yet this single storage project has more than doubled in real cost since 2023 and slipped three years. Australia is betting its grid stability on a single, ballooning, delayed asset while committing to retire firm coal and nuclear generation. The cost spiral reflects the fundamental dynamic: renewables are cheap per megawatt-hour, but the system cost to make them reliable, storage, transmission, overbuilding, runs far higher than headline figures suggest.

What it means

At $25 billion for one storage facility serving one region, the whole-system cost of a renewables-only grid becomes visible. Australia is now locked into a path where grid firming depends on a parade of megaprojects that face the same pressures: construction inflation, design delays, supply-chain bottlenecks. A firm alternative, nuclear generation, remains banned by law, foreclosing the low-material, sovereign, long-lived option that would displace the need for such sprawling storage infrastructure. The bill for energy transition is being paid in delay and cost, not speed or savings.