Snowy Hydro 2.0: the mother of all energy boondoggles

When former Liberal Prime Minister Malcolm Turnbull first announced the Snowy Hydro 2.0 pumped hydro project in 2017, it was billed as a $2 billion project capable of producing 2 megawatts of power on demand and 350,000 megawatt-hours of storage by 2021.

Snowy Hydro 2.0 has been delayed several times since its announcement. The last major review was conducted in 2023, with expenditures forecast to reach $12 billion. This review led to a reset of Webuild’s contract to an “incentivised target cost model” – essentially cost-plus-margin payments, but including bonuses for beating targets and “pain thresholds” beyond which Webuild forfeits a share of its margins.

According to The Australian newspaper, the Albanese Government is preparing to reveal a further major cost increase for the troubled Snowy 2.0 pumped hydro project after receiving a detailed cost review in June.