Updated Cost Figures and Timeline Delays
The cost of the Snowy Hydro 2.0 renewable energy project has been reassessed, with Federal Government-owned Snowy Hydro confirming an updated target cost of $22.2 billion. This figure includes a scenario allowance that brings the total potential cost to $25 billion, following a review by principal contractor Future Generation Joint Venture.
The new estimate is more than 12 times the original $2 billion promise made nine years ago by then Liberal Prime Minister Malcolm Turnbull for the expansion of the Snowy Hydro in southern New South Wales. The original Snowy Hydro scheme was completed in 1974.
Energy Minister Chris Bowen told News24 that the revised figures represent the "best possible estimate," describing the project cost as "$22.5bn with a buffer up to $25bn." Bowen stated that he believed the project remained a good use of taxpayer money despite what he termed "disappointing" cost blowouts.
The reassessment has also pushed the project's completion timeline. The new target completion date is now set for late 2029, which is eight years later than the date originally promised in 2017. The cost has doubled from the $12 billion estimate provided in 2023.
Political Reactions and Criticism
Bowen attributed the initial underestimation to the previous government, claiming that original decisions were made "very immaturely." He argued that the design was immature when the prior administration committed to the project, noting that hardly any technical work or soil testing had been conducted at that time.
Shadow Energy Minister Dan Tehan and Coalition colleagues have called for Bowen to resign. They demanded that the government release the full cost report and issue an apology to taxpayers regarding the significant increase in projected expenses.
Opposition leader Angus Taylor also criticized Bowen, attacking his competence by claiming "everything that bloke touches turns to custard." The criticism highlights the growing political tension surrounding the project's financial trajectory.
Industry Minister Tim Ayres defended the Energy Minister and the current approach. Ayres claimed that the project was designed by Barnaby Joyce, Malcolm Turnbull, and Scott Morrison in a hurry without proper engineering or costings, suggesting the foundational errors originated with previous leadership.
Executive Compensation Amidst Cost Increases
Amidst the announcement of the massive cost increase, details regarding executive compensation at Snowy Hydro have emerged. Snowy Hydro chief executive Dennis Barnes received a $2 million remuneration package in the 2024-25 financial year.