Snowy Hydro continues to power ahead, keeping its December 2028 completion date for Snowy 2.0 firmly in its gaze.
The project has reached 67 per cent completion, nearly doubling the average monthly completion rate over the past two years (reaching 0.98 per cent delivery in August).
While development continues, Snowy Hydro has run into cost and productivity challenges it said are reflected internationally across many major infrastructure projects.
The company has directed contractor Future Generation joint venture (FGJV) – a partnership between Australian engineering and construction business Clough, Italian engineering firm Webuild and construction company Lane – to undertake a cost reassessment to delivering Snowy 2.0.
The reassessment, which is expected to take nine months to complete, will explore cost pressure sources associated with contractor productivity targets not being realised, challenging geology, and supply chain cost increases.
“Since the reset, the project has generally been progressing well,” Snowy Hydro chief executive officer Dennis Barnes said.
“Despite disruption, including work stoppages due to safety concerns and continuing challenges with geology, we’ve been able to recover that time and get us to where we need to be in terms of schedule.
“The reset was about getting Snowy 2.0 moving again by creating a more collaborative relationship with the principal contractor and achieving safe progress. We’ve done both, but the productivity uplift hasn’t been to the degree we needed.”
Productivity concerns relate to tunnel boring machine (TBM) Florence being halted in May 2024 due to operational challenges related to harsh rock conditions, while contractors have faced work stoppages due to safety concerns. Snowy Hydro also flagged “general productivity underperformance”.
The project will also need deploy a fourth TBM to de-risk challenging geological conditions through the Long Plain fault zone, and explore concerns related to costly offshore purchases related to Snowy 2.0’s underground power station.
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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