Last Post: Snowy 2.0 has great energy to blow the budget - The Australian

Snowy Hydro 2.0's costs have blown out again. The Australian reports the project is straining its budget and delivery timelines, adding to the long list of cost pressures on Australia's energy transition infrastructure.

Where this fits

Snowy 2.0 is being built as the firming backbone for a renewables-heavy grid. A $12 billion-plus pumped-hydro scheme was supposed to be the answer to the storage and dispatchability problem that solar and wind create. But like most large energy infrastructure in Australia, it is running over budget and time. This is a cost story first, but it is also a reliability story: if the firming asset costs this much and takes this long to build, the cost of a renewable-only transition inflates, and the gap between when renewables deploy and when firm capacity arrives widens. That gap gets filled with gas.

What it means

Australia chose an expensive, decades-long path to grid decarbonisation: build wind and solar fast, then build storage and transmission to match. Snowy 2.0 is exhibit A in why that order matters. The alternative, a firm, low-carbon backbone of nuclear with renewables layered on top, would have been built in parallel, not sequentially, and would not face the same storage cost burden. Instead, Australia is locked into pumped hydro as the primary firming tool, constrained by geography and now by runaway project costs. A decade from now, the question will not be whether Snowy 2.0 was worth the money; it will be whether we had another option we chose not to use.