Snowy 2.0 faces “extreme” cost risks and stalled works

Snowy Hydro is conducting an internal audit that is expected to quantify cost blowouts. Cost blowouts are being driven by the cost of materials including steel and concrete. The cost of major infrastructure projects have spiked since the COVID pandemic, which coincided with a global energy crunch spurred by Russia’s invasion of Ukraine. The physical challenges of building Snowy 2.0, which is located under a national park in a sensitive alpine environment, is typified by the fate of Florence the tunnel-boring machine. It spent most

of 2023 stuck in soft ground less than 100 metres into its 15 kilometre task. It was freed and on May 16 became wedged again in hard rock while excavating a curve in the tunnel, and it took a team of contractors with high-pressure water jets seven weeks to blast it free. Adding further costs to Snowy 2.0, tunnel workers contracted to the project in September secured wage rises of 26.5 per cent over four years, raising their annual salary to more than $300,000. Snowy

2.0 can supply power on demand when the grid needs it most, supplying back-up for renewables when the wind isn’t blowing and the sun isn’t shining.

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