An audit of Australia’s most ambitious renewable energy project has found that despite a reset in 2023, there are still “significant deficiencies” in how Snowy 2.0 is being managed.

The project involves building a hydro-electric power station underground in the NSW Kosciuszko National Park with tunnels linking the Tantangara and Talbingo reservoirs.

The latest audit, conducted by the Australian National Audit Office (ANAO), was tasked with looking at the effectiveness of management in ensuring Snowy 2.0 delivers value for money.

It found since the project’s reset in 2023, Snowy Hydro’s management of the project had been “partly effective”.

However the auditors found significant shortcomings including Snowy Hydro still lacking a reliable system to track future costs of the project.

The baseline schedule for the project’s completion had not been agreed upon, meaning the auditors were unable to determine how far off completion the project was.

Snowy Hydro had also been ineffective in holding contractors accountable, with an incentive framework designed to reward contractors for hitting milestones not working.

Meanwhile there is no access to “quality data” that would allow monitoring of the project.

The auditors found the “productivity gains” expected following the reset had not been achieved.

This latest report is the second audit into the mega project plagued by delays and setbacks.

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In 2023, contracts between Snowy Hydro and lead contractor Future Generation Joint Venture were renegotiated, with Minister for Climate Change and Energy Chris Bowen, and Minister for Finance Katy Gallagher signing the relevant approvals for the reset.

This reset saw the cost go to $12 billion, six times the original estimate announced in 2017.

In October 2025, Snowy Hydro confirmed it would need more money to complete the project and it is currently undergoing a cost-reassessment.

Recommendations agreed

Snowy Hydro has agreed to four out of the five recommendations made by the ANAO, including strengthening management risks to ensure its contractors are meeting their requirements.

It partly agreed to publicly publishing the project’s progress against published targets.

“Snowy Hydro agrees with four of the ANAO’s five recommendations, covering enhanced documentation, reporting traceability and performance measurement within the existing governance framework. We partially agree with the remaining recommendation relating to public reporting,” a spokesperson said.

“While the recommendations do not propose fundamental changes to Snowy 2.0’s underlying delivery model, governance structure or management approach, we are committed to continually testing and improving our delivery oversight.”

The audit also included a response from primary contractor Future Generation Joint Venture, which acknowledged a number of challenges outside their control “which might impact the project”.

It went on to say “FGJV remains committed to collaborating with [Snowy Hydro] to ensure processes followed under the contract on the Project are robust and efficient moving forward and identify solutions on a best for project basis”.

Political response

A spokesperson for Energy Minister Chris Bowen issued a statement to the ABC, calling the findings “sensible recommendations” whilst showing support for Snowy 2.0’s completion.

“Once working it will provide crucial storage to support 6.6 GW of low cost renewable generation, enough to power 3 million homes per week, boosting reliability and putting downward pressure on prices across the National Energy Market,” the statement read.

But there were also criticisms of the previous Coalition government’s handling of the project prior to Labor taking over.

“The audit report outlines how warnings about costs were ignored as early as January 2020,” the statement read.

The Shadow Minister for Energy Dan Tehan described the findings as “deeply concerning” and criticised Mr Bowen’s handling of the project.

“Transparency had to be forced on the cost blowouts of this by the ANAO and we now need full transparency on all the other projects which are blowing out under Chris Bowen,” he said.

“What we need is a pause and we need a complete review of the project and the contracting arrangements.”

Snowy 2.0 has faced scrutiny over ongoing safety issues and the revelation that executives collected more than $1.2 million in bonuses despite missing financial targets.

The project is expected to provide up to 2,200 megawatts of electricity to the national grid, and is anticipated to be completed by December 2028.