Snowy Hydro 2.0 calls in new $75m tunnel boring machine to meet 2028 timetable

A fourth tunnel boring machine has been imported amid fears tougher than expected terrain could derail the 2028 timeline for the $12bn energy project.

The Snowy 2.0 project was initially projected to cost about $2bn and be completed in 2021, before the cost was revised to almost $6bn, and then $12bn.

The commonwealth-owned Snowy Hydro has made an emergency intervention on Australia’s biggest energy project, importing a fourth giant tunnel boring machine amid fears tougher than expected ground conditions may derail a 2028 timeline for the $12bn hydro facility.

Snowy’s contingency to buy a fourth tunnel boring machine at a cost of $75m was first revealed by The Australian in February, as the company battled a series of construction challenges.

An existing tunnelling machine, known as Florence, became stuck underground after being bogged in soft ground, forcing work to stop and raising fears of further delays.

Snowy chief executive Dennis Barnes said the decision was taken after new ground testing analysis provided it with a better understanding of the geology throughout a planned 17km tunnel that will connect Snowy 2.0’s upper reservoir to its underground power station.

The energy producer had previously flagged the difficult patch of rocky terrain, but Mr Barnes said the acquisition of a fourth tunnel boring machine would be insurance for the 2028 timetable.

“We understand the geology a lot more, and that tells us that it’s a bit more variable than we were expecting,” Mr Barnes told The Australian. “So we want to get into it sooner than when Florence would get there.”

Snowy Hydro is bringing in a fourth tunnel boring machine which will be specially designed to deal with the difficult geological conditions.

Mr Barnes said the $75m cost was coming from a contingency amount baked into the project’s revised $12bn budget unveiled earlier this year. The initial plan had called for Florence to dig the tunnel, perhaps with the assistance of another machine later. That would see Florence reach the difficult terrain around 2027, but Mr Barnes said the new machine would allow the two giant machines to simultaneously work on the 17km tunnel.

The machine, still unnamed, will arrive in Australia next year before beginning tunnelling later that year.

Mr Barnes said the fourth boring machine was being specially designed to deal with the difficult geological conditions.

He said it would have a longer conveyor belt, beyond the 250m equipped on the other three machines operated at Snowy 2.0. Stopping every 250m during the difficult geology would heighten the risk, Mr Barnes said.

Critically, the bespoke boring machine will also have specially fitted high-pressure water jets mounted to the front, allowing the machine to be dislodged and preventing similar incidents to that incurred by Florence.

Snowy just weeks ago was forced to announce that Florence was stuck, and dislodging the ­machine was delayed while the developer waited for high-­pressure water jets to allow it to be dislodged. Florence was in 2023 bogged in soft ground, causing further delays. “If you do get slightly stuck, you can quickly blast away the pinch point and move on,” Mr Barnes said.

The progress, or lack thereof, of Florence has come to embody the confidence of some in Snowy meeting its 2028 target.

Snowy Hydro CEO Dennis Barne.

Mr Barnes acknowledged the “disappointing performance” of Florence as he accepted that the slow pace of tunnelling had contributed to the decision for a fourth tunnel boring machine but said it would probably have been needed anyway.

The 2000-megawatt expansion of the pumped hydro storage project in NSW has been beset by problems that has forced prolonged delays and swelled the bill.

Snowy has specifically blamed the mobilisation and resourcing implications of the Covid-19 pandemic; the effect of global supply chain disruption and inflation ­affecting the cost and availability of a skilled workforce, as well as materials and shipping.

The Snowy 2.0 project was initially projected to cost about $2bn and be completed in 2021, before the cost was revised to almost $6bn, and then $12bn.

Contractor Webuild took on failed contractor Clough’s role in their joint venture projects at Snowy Hydro 2.0 after the West Australian engineering company collapsed in December 2022.

Snowy shapes as the best hope to run a grid predominantly powered by renewables. Once complete, it will be able to provide enough electricity to run large swathes of the grid on its own for about a week.

It will also ease the stress on the energy industry. Australia’s record proliferation of solar sees the wholesale electricity price tumble during sunny days, often below zero. This means inflexible generators such as coal power stations can often lose significant amounts before the sun sets and wholesale prices rise.

Once Snowy is ready, it will use cheap renewable energy to push water uphill, and when the sun sets it will be able to release the water downhill, driving turbines and producing electricity.