The Snowy 2.0 hydro storage expansion plan is a project aimed at meeting Australia's electricity needs in a future with fewer coal-fired power stations.
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Snowy Hydro chief operating officer Roger Whitby told senators on Tuesday the economic business case for the massive expansion was based on Australia's anticipated needs.
"Snowy 2.0 is a project for the future. It's not a project for the current state of the market," he told an estimates committee hearing in Canberra.
"This is looking forward to what will be required when a number of the existing old thermal generators are retired and we have increasing penetration of renewable energy."
Economic modelling for the project was done before the Turnbull government announced its national energy guarantee policy.
"A well-designed NEG should enhance the viability of the Snowy 2.0 project, but we're not assuming that in terms of what's been done to date," Mr Whitby said.
"Snowy 2.0 is viable for the future ... where the coal-fired generation fleet is ageing, it does not appear that's going to be replaced and obviously, we have commitments to meet decarbonisation objectives internationally."
The Australian Renewable Energy Agency told the committee on Monday there would need a lot more storage than "simply Snowy" in the future.
"There will be a number of other projects we will need to have come into the market because Snowy 2.0 will reach a capacity around about 2030," chief financial officer Ian Kay said.
The feasibility study found the project, while financially and technically viable, is likely to cost between $3.8 billion and $4.5 billion, far outweighing an initial estimate of $2 billion.
Snowy Hydro will make a final investment decision by the end of the year but Mr Whitby warned a lot of work needed to be done first.
That includes knowing what upgrades will happen to the network of poles and wires.
At the moment, Snowy's ability to increase capacity is constrained by a high voltage transmission system designed three decades ago based on the delivery of coal-fired power to load centres, Mr Whitby said.
It had to be "adjusted for the future".
Senior energy department official Rob Heferen acknowledged this, saying the aim was "to ensure that whatever needs to be sorted out is sorted out by the time the board needs to take its final decision".
Australian Associated Press
