An ambitious multi-billion-dollar expansion of the iconic Snowy Hydro project could cost more than twice as much as previously thought, but the Prime Minister argues it's still a viable project.

Snowy Hydro Limited will release a feasibility study into the expansion today, claiming the project is both technically and financially able to go ahead.

The company's chief executive, Paul Broad, says the costs have increased from the initial $2 billion price tag, to somewhere between $3.8 and $4.5 billion.

"The board is committed to doing $60 million worth of work in the next six months to refine those costs and we expect [the cost] is at the lower end of the spectrum," Mr Broad said.

"It's expensive, but it stacks up economically."

How will expansion work? Utilising existing reservoirs, a new tunnel could link the lower Talbingo Reservoir, with either the upper Tantangara Reservoir, or Lake Eucumbene

Utilising existing reservoirs, a new tunnel could link the lower Talbingo Reservoir, with either the upper Tantangara Reservoir, or Lake Eucumbene Another pump and a large power station would be built, similar to the Tumut 3, which currently has Australia's largest pumped hydro storage capacity

Another pump and a large power station would be built, similar to the Tumut 3, which currently has Australia's largest pumped hydro storage capacity Experts say pumped hydro can reach full power in as little as 30 seconds and is cheaper than the alternatives

Experts say pumped hydro can reach full power in as little as 30 seconds and is cheaper than the alternatives The expansion would cover the shortfall on peak days in summer if wind and solar outputs aren't keeping up with demand

Mr Broad said the price had increased due to the complexity of the engineering and building tunnels in the mountains, but stressed the cost estimates were "conservative".

The company, which is mostly owned by the Victorian and New South Wales governments, will fund the expansion rather than the Federal Government.

"It won't be a cost to taxpayers, we will be paying for this out of the balance sheet of Snowy Hydro."

A Senate committee has already heard of risks that costs could skyrocket to $3 billion, once the construction of transmission lines is included.

The feasibility study is likely to suggest that despite geological challenges the project can go ahead.

Malcolm Turnbull promises the project will deliver a more affordable and reliable energy system. ( AAP: Mick Tsikas )

Dubbed Snowy 2.0, the expansion links two major dams in the Snowy Mountains with 27 kilometres of tunnels.

"Snowy Hydro 2.0 is a nation-building project. It will not only deliver a more affordable and reliable energy system but will also generate jobs and grow our economy," Mr Turnbull said in a statement last night.

If it goes ahead, the expanded Snowy Hydro project will be operational from 2024.

Energy has been a major focus of the political year, and the Prime Minister has pinned much of his energy credentials on the project.

"The project will act as a giant 2,000 megawatt battery in the centre of the National Energy Market, providing enough power for 500,000 homes and much-needed backup for the increasing amount of wind and solar coming into the system," Mr Turnbull said.

Energy has also been a flashpoint between the major parties, both at a state and federal level.

On the day Mr Turnbull announced the expansion, his Energy Minister Josh Frydenberg and South Australian Premier Jay Weatherill were engaged in an on-camera spat about the Federal Government's criticism of state energy policy.

Some towns in the Snowy Mountains are already claiming boosts in traffic and people since the project was foreshadowed.