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Timeline, budget reset for Snowy 2.0 pumped storage

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Timeline, budget reset for Snowy 2.0 pumped storage

Snowy Hydro’s management team said it is working toward resetting the delivery timeline and budget for the Snowy 2.0 project with its principal contractor, Future Generation Joint Venture (FGJV), as part of an ongoing project review.

Snowy 2.0 includes the construction of an underground power station and about 27 km of tunnels within the Kosciuszko National Park in the Snowy Mountains region of New South Wales. Snowy Hydro said Snowy 2.0 is “critically important” and “will help underpin Australia’s transition to a renewable energy future.” This pumped hydro project will provide the National Electricity Market with 2,000 MW of on-demand generating capacity and 175 hours of energy storage.

The reset is intended to ensure that this clean energy infrastructure project is placed on a “robust and sustainable footing” for FGJV to progress the schedule in a “realistic and productive” manner, Snowy Hydro said.

While progress has been achieved, delays to Snowy 2.0’s contracted schedule and likely cost impacts exist beyond the contingency allowed, which remain under review by Snowy Hydro. Four categories of factors are contributing to schedule delays and likely cost increases:

  • Mobilization and resourcing implications of the COVID-19 pandemic;
  • Global supply chain disruption and inflation impacting the cost and availability of a skilled workforce, materials and shipping;
  • A number of design elements requiring more time to complete due to their technically complex nature, with the final design now being more expensive to construct; and 
  • Impact of variable site and geological conditions, with the most impactful being the soft ground encountered that is delaying tunnel boring machine Florence’s progress at Tantangara. 

Snowy Hydro said it anticipates that the timeline for full commercial operation will be delayed by a further 12 to 24 months from the current publicly released dates. First power could now be achieved as early as June to December 2027 and as late as June to December 2028. Commercial operation of all units could now occur as early as December 2028 and as late as December 2029, according to a release.

Snowy Hydro said it expects more detail on the budget implications of the project reset around July 2023. 

“This project is critically  important to the transition of Australia’s electricity grid and it’s crucial that we are working to a safe, efficient and realistically achievable timeframe to enable orderly planning for all our stakeholders,” said Snowy Hydro Chief Executive Officer Dennis Barnes.

More than 2,400 people are directly employed on the project at present.