In December 2018, Snowy Hydro Limited made a final investment decision to proceed with Snowy 2.0. Snowy 2.0 is a pumped hydro project designed to add 2000 megawatts of on-demand generation and approximately 350,000 megawatt hours of large-scale storage to the National Electricity Market. Snowy 2.0 includes the construction of an underground power station and around 27 kilometres of tunnels within the Kosciuszko National Park in the Snowy Mountains region of New South Wales.
Snowy Hydro Limited is using an engineer, procure and construct (EPC) contract to complete most of the Snowy 2.0 project. The contracted sum under the EPC contract is $5.11 billion. This makes up more than 85 per cent of the total Snowy 2.0 project cost approved by Snowy Hydro Limited.
The audit objective was to examine the effectiveness of Snowy Hydro Limited’s governance arrangements for early implementation of Snowy 2.0, the expansion to the Snowy Hydro Scheme.
- Snowy Hydro Limited’s governance of the early implementation of Snowy 2.0 is effective.
- Snowy Hydro Limited has established effective governance frameworks to deliver Snowy 2.0. These governance frameworks provide the Snowy Hydro Limited Board of Directors (the Board) with appropriate oversight, including the information required to inform decision-making. The Snowy 2.0 risk management framework supports the ongoing oversight of risks. Procurement and contract management frameworks provide an appropriate basis for Snowy Hydro Limited’s delivery of Snowy 2.0.
- Snowy Hydro Limited has established appropriate arrangements to manage the Snowy 2.0 EPC contract. The EPC contract management arrangements have provided Snowy Hydro Limited with a sound basis for managing the performance of the EPC contractor. Snowy Hydro Limited should continue to implement these contract management arrangements over the life of the project.