Costs of Australian megaproject rise twelvefold: Snowy Hydro 2.0 heads toward $25 billion

Australia’s Snowy Hydro 2.0 pumped-storage hydropower project, which we reported on in 2017 and two years later when it received government approval, has become a textbook example of how costs and timelines for major infrastructure projects can differ significantly from initial estimates.

When then-Australian Prime Minister Malcolm Turnbull backed the project in 2017, the investment was expected to amount to $2 billion. However, a feasibility study we cited at the time had already put the cost at $3.8–4.5 billion. The reason was challenging geological conditions revealed by exploratory drilling.

The project is intended to connect two existing reservoirs in the Snowy Mountains scheme using tunnels up to 27 km long and build an underground power station with a capacity of 2 GW. Its 350 GWh capacity will allow it to operate at full output for 175 hours, or more than a week. Commissioning was then expected in 2024.

Approval in 2019