Snowy Hydro has directed Snowy 2.0 principal contractor Future Generation Joint Venture (FGJV) to undertake a comprehensive line-by-line reassessment of its costs to deliver Snowy 2.0, as the project’s delivery remains set for its December 2028 completion.
As of October 2025, the project is now 67 per cent complete, and Snowy Hydro believes material cost pressures mean now is the time to oversee FGJV as it carries out the cost reassessment, which is expected to take up to nine months to complete. Independent construction cost experts have been engaged to verify the principal contractor’s reassessment.
Snowy Hydro CEO, Dennis Barnes, said Snowy 2.0 has made good progress since the 2023 project reset. Delivery rates have almost doubled in the past two years, with the average monthly progress of 0.57 per cent increasing to 0.91 percent, and August 2025 hitting 0.98 per cent delivery. This is despite pressures that reflect cost and productivity challenges currently being experienced across countless major infrastructure projects.
“Since the reset, the project has generally been progressing well and is now 67 per cent complete,” Mr Barnes said.
“Despite disruption, including work stoppages due to safety concerns and continuing challenges with geology, we’ve been able to recover that time and get us to where we need to be in terms of schedule.
“The reset was about getting Snowy 2.0 moving again by creating a more collaborative relationship with the principal contractor and achieving safe progress. We’ve done both, but the productivity uplift hasn’t been to the degree we needed.”
Some of the most significant sources of cost pressure for Snowy 2.0 since the reset include:
Costs associated with contractor productivity targets not realised
According to Snowy Hydro, while the 2023 reset succeeded in substantially increasing productivity, there remain challenges. This is due to a combination of factors, including delays from TBM stoppages in 2024, work stoppages associated with safety concerns and general productivity underperformance. Snowy Hydro’s reassessment will examine past productivity performance and our future productivity requirements.
Costs of de-risking challenging geology no longer being able to be absorbed
A fourth TBM will be used to derisk challenging geological conditions through the Long Plain Fault Zone and help protect the project’s schedule. The initial assessment was that the cost to purchase, deploy and operate would be covered within the project costs, however cost pressures have meant this is no longer possible.
Supply chain cost increases
Snowy Hydro said its contractor has identified unforeseen supply chain cost increases to significant, bespoke procurement, including major offshore purchases associated with Snowy 2.0’s underground power station.
Mr Barnes said while the need to reassess Snowy 2.0’s cost is disappointing, the critical importance of the project to electricity users across the network has not changed.
“Snowy 2.0 will be a cornerstone of Australia’s transition to renewable energy, providing more than half of the long-duration storage the grid needs by 2050,” he said.
“It will enable the introduction of more wind and solar by acting like a giant battery, storing and delivering enough excess energy to power around 3 million homes for a week.
“Snowy 2.0 is being built to operate for 150 years. It is as important to Australia now as the original Snowy Scheme was decades ago.
“Like the original scheme, which still helps underpin electricity reliability today, the benefits of Snowy 2.0 will be felt for generations.”
