Snowy 2.0 costs $25bn – but will save just $7bn - The Australian

The cost of Snowy Hydro 2.0 has blown out to $25 billion, while the projected savings to consumers amount to only $7 billion over the project's lifetime. That is a net cost to the public of $18 billion for a scheme that was promised as an economic no-brainer when first backed by government.

Where this fits

Snowy 2.0 is the poster child for the hidden system cost of a renewables-heavy grid. Pumped hydro is expensive firming infrastructure, built to store and release power when the sun is not shining and the wind is not blowing. The blowout shows that firm dispatchable power, whether hydro, nuclear, or gas, does not come cheap. Australia is committing tens of billions to add the firming capacity that a variable renewable fleet demands, while the firm power alternative, nuclear, is banned by law. The cost of the transition is not borne by the price of the solar panel or the wind turbine; it is borne by the grid backbone you have to build to make them work.

What it means

An $18 billion net cost is a tax on energy affordability paid by all consumers to enable renewable penetration. That burden will grow as more variable capacity is added and more firming infrastructure must follow. Australia is locked into the path of highest whole-system cost while the lowest-emission firm alternative sits off the table, and the supply chains for panels, batteries and processing remain in Chinese hands.