The much-anticipated Snowy 2.0 project in NSW continues to push forward, reaching 67 per cent completion in recent weeks.
Snowy 2.0 is being constructed at nearly double the pace it was two years ago, reaching 0.98 per cent delivery in August (up from 0.57 per cent).
Despite this, Snowy Hydro has run into cost and productivity challenges it said are reflected internationally across many major infrastructure projects.
The company has directed Future Generation joint venture, the contractor made up of Australian engineering and construction business Clough, Italian engineering firm Webuild and construction company Lane, to undertake a cost reassessment into Snowy 2.0’s delivery.
This will explore cost pressures associated with missed contractor productivity targets, challenging geology, and supply chain cost increases.
Productivity headwinds relate to tunnel boring machine (TBM) Florence being halted in May 2024 due to operational challenges related to harsh rock conditions. Other work stoppages have been caused by safety concerns.
A fourth TBM is being deployed to de-risk challenging geological conditions through the Long Plain fault zone, where a 5km tunnel is being built deep in the Snowy Mountains to connect Tantangara reservoir with a power station located about 1km underground.
Snowy Hydro chief executive officer Dennis Barnes acknowledged the cost reassessment was disappointing, but the project’s importance remains unchanged.
“Snowy 2.0 will be a cornerstone of Australia’s transition to renewable energy, providing more than half of the long-duration storage the grid needs by 2050,” he said.
“It will enable the introduction of more wind and solar by acting like a giant battery, storing and delivering enough excess energy to power around three million homes for a week.
“Snowy 2.0 is being built to operate for 150 years. It is as important to Australia now as the original Snowy Scheme was decades ago.”
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