Originally published by Robert Gottliebsen of The Australian.
23.07.2026
Instead of spending $4.2m entertaining environmental activists in Fiji in October, Energy Minister Chris Bowen should take them to Australia’s high country where they would be introduced to the real world.
If the ministers and officials going to the pre-COP meeting went to Snowy 2.0, they would discover their discussions about emissions targets are wasted unless solar, wind and battery projects get their engineering, costing, community relations and contracting right.
In the wider Snowy 2.0 hydro expansion project, Australia got all those essentials horribly wrong and the result is undermining the economics of the whole renewables program. Discussions about emissions targets without clear strategies to achieve targets are worse than a waste of time.
In the sun at Fiji, Bowen can ignore the chaos back in Australia
But this week in Australia’s high country, the falling snow is not softening the intense corporate drama taking place. The repercussions from the Snowy 2.0 mistakes will spread from Brisbane to Tasmania.
The Snowy 2.0 hydro battery involves transmitting solar and wind power from areas in western Victoria and NSW to the high country via thousands of huge pylons erected on our best rural land. That power is used to pump water up the mountain to a dam and then it regenerates power on the way down.
It is a key component to the estimated $450bn planned to be spent on the nation’s enormous renewables generating and transmission operation. The rest of the program is also in trouble, albeit not as bad as for Snowy 2.0.
For good reason Bowen is being secretive about the full explosion in costs but, thanks to the work of Aidan Morrison at the Centre for Independent Studies, a construction outlay of $450bn is a reasonable estimate.
Most of the providers of the $450bn have been given guaranteed returns, which are not being disclosed.
So Bowen does not want Fiji to be about disastrous deals that were done. Transmission guarantees could take the total 35-year outlay to between $900bn and $1 trillion.
Yet warnings of a cost disaster were there from the start. Snowy 2.0 is one of the most complex engineering projects ever attempted in Australia and the loss of rural land in the transmission and generating projects caused vigorous community opposition.
Italian-owned Webuild took an enormous risk offering a $5bn fixed-priced tender for the high-country part of the project. Almost from the start the project started to go wrong. A boring machine called Florence was bogged for 11 months just 150m into its 15-km journey. During those early years, two safety-related incidents took place where injury and /or death were narrowly avoided.
Later, at a huge cost, a second drilling machine was commissioned to drill from below and meet up with Florence.
As the cost escalated from the Webuild $5bn fixed-price tender to around $12bn, incredibly Webuild was able to negotiate a cost-plus contract. The best estimates of the cost are around $20bn in construction plus a further $20bn for transmission towers and interest. But the estimated cost is now exploding again: the CFMEU has moved onto the site and that could mean an extra 30 per cent in construction costs.
Worse still, SafeWork NSW has launched criminal proceedings against Webuild over those two incidents in 2022 and 2023. The company is vigorously defending the actions but undertaking this complex engineering project and then being sued for criminal safety offences while dealing with a very active CFMEU may create an impossible situation.
The people on site tell me that in recent times they have seen what appeared to be experienced engineers not connected to Webuild examining closely what is taking place. They don’t smile. It would seem that Webuild is seeking help, comforted by its cost-plus contract. Webuild is also one of two short-listed tenderers for the new AFL stadium, so the Snowy 2.0 drama creating controversy in Hobart
But for the rest of the nation, the drama is being kept out of sight yet it is being intensified by events outside the high country.
CFMEU pressure could substantially increase the cost of the transmission lines. AGL is saying that it is no longer economic to construct wind farms and one of the major networks, Transgrid, is saying that the early-stage investment return guarantees (prior to undisclosed “rort” guarantee returns) are no longer economic.
It is now understood that gas backup will be required to provide some degree of security for the renewables generation while the whole gas industry is in a mess because of the government’s new gas policies that were not properly thought out.
Remember we are dealing with the base of the Australian nation – its ability to generate power economically.
The electric-power market is also to be transformed by massive data centres which will rely on this high-risk, high-cost renewables project.
Queensland very wisely can see the trouble further south and is not signing up because it has an “old-fashioned belief” that its job is to provide power at the lowest cost with total reliability.
But the Albanese government is requiring Australian data centres to link to renewables power. The only way Queensland can do that is to link to the chaos further south.
History tells us that the power for the data centres and other large users like aluminium refineries will cream the system, leaving ordinary consumers badly mauled. And so, as Adam Creighton explained, the Australian Energy Market Operator has said that consumers will be playing “an increasingly active role” in ensuring the power system remains stable.
“Involuntary load shedding” will be required. This is another way of saying that in times of crisis consumers would suffer brownouts and blackouts. Huge network charges are coming.
And those that have invested heavily in batteries with the help of subsidies would have power dragged out of their batteries (including car batteries) when the system is short of power.
Meanwhile enjoy Fiji.