The Federal Government is topping up the Snowy 2.0 project as part of its pre-election renewable energy pitch.

Former prime minister Malcolm Turnbull's pet project will receive “up to $1.38 billion in an equity investment for Snowy 2.0”, furthering plans to build a new underground power station in the Snowy Mountains.

“Snowy 2.0 will inject the energy supply and reliability our electricity market needs, helping cut costs to families and businesses and cut Australia's emissions,” Prime Minister Scott Morrison said.

“Snowy 2.0 is shovel-ready which is why it's one of the first cabs off the rank in our next tranche of energy projects to underwrite power generation, so we can make electricity more affordable and reliable.”

The Snowy 2.0 project revives the Snowy Hydro Scheme in the Great Diving Range, with plans to link the Talbingo and Tantangara reservoirs in Kosciuszko National Park.

After the federal funding injection, Snowy Hydro is expected to pay for the rest of the project.

The company has estimated a cost of between $3.8 billion and $4.5 billion would be able to multiply Snowy Hydro's generating capacity by 150 per cent.

“After almost two years of rigorous engineering, financial and market modelling, we're excited to embark on a new chapter,” Snowy Hydro chief Paul Broad said.

“With more intermittent generation coming online Snowy Hydro will play an increasingly critical role to keep the lights on.”

Official estimates say the project should provide 175 hours of energy storage to power 500,000 homes during peak demands, and create up to 5,000 direct and indirect jobs across the region.