Snowy 2.0 was sold as a $2 billion project. It could now cost $25 billion

Snowy 2.0 began in March 2017, when Prime Minister Malcolm Turnbull announced a nation-building idea: expand the Snowy Mountains Scheme into a giant "battery" that pumps water uphill when power is cheap and releases it when power is scarce. The cost was about $2 billion, and power was promised by 2021.

On 22 October 2026, Snowy Hydro released its latest reassessment. The new target is $22.2 billion, with a contingency that could take the total to $25 billion. First power has moved to early 2029, with full operation later that year.

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The price tag, year by year

That's a project that has become 11 to 12 times more expensive and is running eight years late. It isn't the only federal megaproject to blow out by billions: Inland Rail was sold as a $10.7 billion project and now costs $45.6 billion. See how they compare on our blowout leaderboard.

And Snowy 2.0's cost figures don't include the interest on the money borrowed, or the new transmission lines needed to connect it to the grid. Energy executive Ted Woodley and economist Bruce Mountain have estimated that adding interest and a share of the new transmission lines takes the cost to about $42 billion. Snowy Hydro called their figures unsubstantiated, and others dispute how much transmission should be counted. It is not an official figure, but it shows how much sits outside the headline number.

What went wrong

The ground fought back. In February 2023, the tunnel boring machine Florence hit soft ground 150 metres into a 15-kilometre tunnel, the ground above collapsed into a sinkhole, and the machine sat stuck for around 11 months. Under the 2023 reset, Snowy Hydro (and so taxpayers) kept the risk of unknown ground conditions, the ANAO found.

The design wasn't finished. Snowy Hydro's reassessment says "the design of the project was immature when the final investment for the project was made", and that its main contractor, the Future Generation Joint Venture (Webuild, Clough and Lane), "failed to meet productivity targets as a result of the construction complexities".

Nobody was holding the contractors to account. In June 2026 the Australian National Audit Office found Snowy Hydro's management of the project since the 2023 reset was only "partly effective". It found "significant deficiencies": there is no agreed baseline schedule, the incentive framework for contractors "is not working as intended", there are not enough controls over payments to secondary subcontractors, and Snowy Hydro "did not seek external verification of its own costs" before the reset. As of 31 March 2026, $11.1 billion had already been spent.

More people, for longer. About 5,000 people now work on the project, which Snowy Hydro chief executive Dennis Barnes said is "obviously a lot more than we thought in 2023".

How far along is Snowy 2.0?

Most of the digging is done. Snowy Hydro's October 2026 update compares progress now with the 2023 reset:

More than 5,000 people are working on it. First power is expected in early 2029 and the new target completion date is late 2029. By 31 March 2026, $11.1 billion had already been spent, the ANAO found.

Bonuses anyway

In September 2025, a month before Snowy Hydro admitted it would need more money, its executives shared more than $1 million in bonuses for meeting non-financial targets, despite missing financial ones. The chief executive's share was reported as $323,000.

Who pays for Snowy 2.0's cost blowout?

Snowy Hydro says "the $22.2 billion target cost is not the amount that will have to be funded by taxpayers". At the previous $12 billion estimate, it says, "around one-third or $4 billion, was Commonwealth investment in the company that Snowy Hydro did not need to repay". The majority was funded by government and bank loans that Snowy must repay with interest, and by Snowy's own cash flows.

How the extra $10.2 billion will be paid for hasn't been settled. "Work is underway on the Commonwealth's preferred capital strategy at the new cost," Snowy Hydro says.

But Snowy Hydro is wholly owned by the Commonwealth. The loans it repays come out of the earnings of a company the public owns.

What you're getting for it

When finished, Snowy 2.0 will link the Tantangara and Talbingo reservoirs through 27 kilometres of tunnels to a power station 800 metres underground, with 2,200 megawatts of capacity. Snowy Hydro says it could power three million homes for a week. ANU energy researcher Andrew Blakers says that when it's finished it will provide "more than 80 per cent of all the energy storage in Australia all by itself". A GHD study estimates more than $7 billion in lower wholesale electricity costs by 2075.

Those benefits may be real. But Australians were told they would get them for $2 billion in 2021, not up to $25 billion in 2029.

Who's to blame?

Energy Minister Chris Bowen and Finance Minister Katy Gallagher say walking away would scrap 5,000 jobs, and that "the former Coalition government left behind a project facing major delays, rising costs and serious delivery risks". Shadow Energy Minister Dan Tehan says "Chris Bowen should apologise to the Australian taxpayer and resign".

Both sides have had their hands on Snowy 2.0. Both sides signed off on the money. And Snowy Hydro's chief executive is making no promises about the new figure: "There's never any guarantees with mega projects," he said.

Your share: the jump from $2 billion to $22.2 billion works out to about $720 for every Australian (on a population of about 27.9 million). For scale, this year's interest bill on the national debt, $27.7 billion, is more than Snowy 2.0's entire target cost: see the debt clock.

Snowy Hydro is wholly owned by the Commonwealth. Whether it's paid for with taxpayer equity, loans Snowy must repay, or Snowy's own earnings, the money is public.