The Australian National Audit Office has found Snowy Hydro has only been ‘partly effective’ in delivering Snowy 2.0 and has handed down five recommendations for the company to improve its management of the nation’s largest committed renewable energy project.

The audit office released its findings into Snowy Hydro’s management and delivery of Snowy 2.0 last month, citing issues with the company’s project management. Issues raised in the audit include: key quality controls have not been effectively implemented, Snowy Hydro has reported that productivity gains assumed at reset are proving difficult to realise and Snowy Hydro does not have adequate arrangements to monitor the impact of adjustments on value for money.

The report declared Snowy Hydro does not have a robust understanding of the forecast cost to complete the project. The recommendations centre on the company needing to improve its project management and reporting on Snowy 2.0 progress.

“The delivery of the Snowy 2.0 project is facing delays, cost increases and problems with delivery, despite the project reset in 2023, which responded to similar concerns.

“Snowy Hydro’s management of the project has been partly effective,” the report states.

“There is increasing risk to the planned delivery and cost of the project in an environment where the cost risk is being held primarily by the Australian government.”

A Snowy Hydro spokesperson said the company has agreed to meet four of the five recommendations.

“Snowy 2.0 will have an equivalent energy storage of around 26 million home batteries, providing more than half of the total energy storage the grid needs by 2050,” the spokesperson said.

“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.

“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 comes before Snowy Hydro’s expected release of a project cost assessment from Snowy 2.0 principal contractor, Future Generation Joint Venture.

Snowy Hydro chief executive officer, Dennis Barnes, told a Senate Estimates committee last month he expects Future Generation Joint Venture, to deliver its revised costs for finishing the project. The assessment was due by the end of June.

“In October last year, we said that we had directed the contractor to do a re-assessment which would take up to nine months,” Mr Barnes told Senate Estimates.