Snowy Hydro 2.0 Faces Another 2 Year Delay

A worker takes a look at the cutter head of Tunnel Boring Machine (TBM) Kirsten at the Snowy Hydro Scheme in Talbingo, Australia, on Dec. 3, 2021. AAP Image/Lukas Coch

Australia’s largest renewable energy project, Snowy Hydro 2.0, has been hit by another delay pushing out its timeline by another one to two years.

Dennis Barnes, the CEO and managing director of Snowy Hydro 2.0 has provided an update on the progress of the multi-billion dollar project, whose completion date has been extended several times.

The CEO cited three problems for the latest round of delays: issues with tunnelling machines, the availability of materials and labour and the impacts of the pandemic.

“A combination of factors has meant that it’s pretty clear that the schedule will go out by between one and two years,” he told ABC Radio.

This means the project is unlikely to be finished until near the end of this decade.

Barnes also said his team was trying to figure out the cost overrun incurred by the delays.

“Over the next few months, we'll work through what the cost implications are.”

In 2017, the Malcolm Turnbull government introduced Snowy Hydro 2.0 as an extension to the Snowy Mountains hydro scheme, which was built between 1949 and 1974 to add 2,000 megawatts of generation capacity to the power grid.

The project will connect two dams in southern New South Wales via 27 kilometres of tunnels and a new power station located 800 metres underground.

It will operate similarly to a natural battery by using excess wind and solar energy to pump water from the lower dam to the higher one and release the water during peak periods to produce electricity.

The project was initially estimated to complete in 2021 with a $2 billion budget, which was later revised to $5.1 billion.

In 2022, there were reports that the project suffered a cost blowout of $2.2 billion.

What Caused the Delays

According to Barnes, tunnelling machines were trapped after hitting a soft layer of rock when digging tunnels, causing the project to stand still.

So far, the machines have only completed one percent of the digging work since their deployment in November 2022.

However, the CEO said they would resume working in “weeks, not months.”

“We weren’t expecting that soft ground. So the effort we’ve been applying over the last few months is to harden that ground to move the tunnel boring machine forward,” he said.

“These machines are huge pieces of equipment which we obviously have to be very mindful of safety when we move them forward.”

Furthermore, Barnes said the COVID-19 pandemic and bushfires had delayed the mobilisation of the project, which prolonged its schedule.

Other major issues include the lack of materials and labour, some problems with the project’s early design and the working site’s conditions.

“You end up with a combination of these factors, which you know, I’ve included in my mind that we have got this delay. The good news is we have made progress on an awful lot of fronts,” he said.

Response from Politicians

Following the announcement, Energy Minister Chris Bowen defended Snowy Hydro, saying it was not the only project suffering delays due to COVID-related issues.

“There are supply chain consequences for every construction project across the world at the moment from the overhang of the COVID-19 pandemic. But I support Snowy being open and transparent with us,” he said.

“We have to bring the Australian people with us on this journey, and that means being open and transparent about the challenges as well as the opportunities. And we'll continue to do that.”

Australian Minister for Climate Change and Energy Chris Bowen speaks to media during the 2018 ALP National Conference in Adelaide, Australia, on Dec. 16, 2018. Mark Brake/Getty Images

Opposition energy spokesman Ted O'Brien warned that the delays would render Snowy Hydro unable to fill the gaps left by the closures of coal-fired power stations across the country.

“The Albanese Labor government has created an energy vacuum in Australia, with baseload power stations being ripped out of the grid without a replacement ready to go,” he said

“Australia’s energy reliability is under siege with rolling delays and blowouts under Labor, including the all-important 660-megawatt Kurri Kurri gas plant, which will not provide power for a year later than scheduled in 2024.”

Meanwhile, Greens Leader Adam Bandt has called on the government to examine the project’s underlying problems.

“We need the government to take the lead in the energy transformation. That includes a big build of not only new renewables generation but also a new transmission,” he told ABC Radio.

“There’s significant problems with some instructions that (Snowy Hydro) got from the last government that hasn’t been fully addressed by this government.”