The former head of Snowy Hydro has expressed surprise at reports the price tag for the already overblown and delayed Snowy 2.0 pumped-hydro project could hit $12 billion.
The major energy project, which was announced under former coalition prime minister Malcolm Turnbull in 2017, is expected to play a key role in Australia’s clean energy transition.
High construction costs and other challenges have already pushed back the 2021 completion date and blown out the $2 billion originally estimated cost of the project.
A report in the Nine newspapers suggests the cost of the project has blown out to more than $12 billion, based on sources familiar with the details of an internal review into the matter.
Former chief executive of Snowy Hydro, Paul Broad, said he was surprised by the scale of the rumoured costings.
“I’m a bit shocked. I don’t know where this $12 billion comes from, that’s news to me. Twelve months ago it was nothing like that,” he told 2GB radio.
“That seems mad.”
Mr Broad said it was a massive project facing many challenges and he was keenly awaiting the details from the review expected to be released on Thursday.
A spokeswoman said Snowy Hydro had indicated in May it was working towards a reset of the delivery timeline and budget for the project, with its principal contractor, Future Generation Joint Venture.
“The process in relation to the budget reset is advanced, but ongoing,” she said.
“We will provide a full and transparent update at the appropriate time.”
Energy Minister Chris Bowen said the government had been upfront about delays.
Mr Bowen received the costings on Tuesday and said he would release it publicly and in full.
“It’ll be released imminently, openly and transparently,” he said.
The minister said the government wasn’t contemplating changes to the scale of the project but there would be an update about how much power it would produce.
He said it would be a challenge to meet the target of the energy grid being 82 per cent renewable by 2030.
“It’s a big lift but it’s achievable as well,” he added.
“We’re providing the support to get the renewable energy around the grid.”
Snowy Hydro 2.0 will connect two dams in southern NSW via almost 30km of tunnels and a new underground power station.
The project is intended to operate as a massive battery by using excess wind and solar energy to pump water uphill before releasing it during peak periods to provide power to the national electricity grid.
Snowy Hydro’s new boss, Dennis Barnes, told a federal parliamentary hearing in May the project was making “positive progress” on a sinkhole issue that had interrupted tunnelling.
By Poppy Johnston in Canberra
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