Bogged down a year ago and the survivor of a surprise sinkhole, the latest partial collapse of a tunnel at a so-called chokepoint raised concerns during a late-night Senate estimates session about another slowdown.
The cost of the nation-building project may have doubled to $12 billion in the past six years, but its value has also increased in a changing electricity market, Dennis Barnes, CEO of Snowy Hydro, told the environment committee on Tuesday.
Mr Barnes said the completion of the project was critical to supporting the national electricity market, decarbonisation and reliability targets.
Like other large batteries, Snowy 2.0 is intended to keep the lights on when the wind isn't blowing or the sun isn't shining, and can power half a million homes for a week.
“Snowy 2.0's role in the market is to facilitate the delivery of the cheapest form of energy… solar and wind energy,” he said.
“We provide the backup for that cheap energy… It's just there for insurance.”
Defending the machine nicknamed Flo, Mr Barnes said the rock had proven to be too soft and too hard over the years, which was not unusual for a mega-project with geological hazards.
The machine stalled in December 2022 and remained stuck there for almost a year before starting drilling again.
Flo recently encountered very hard and abrasive rock which, combined with a bend in the tunnel, halted operations when the rock pinched the machine shield, Mr Barnes said.
Very high-pressure water jets were used to remove the stones before a restart of Flo could be considered, he said.
According to an updated business case, the targeted total cost of Snowy 2.0 remains $12 billion, with commercial operation of all units expected by December 2028.
“Some people would say we can produce nuclear energy for the same price,” Senator Perin Davey told the committee, as the coalition finalizes its nuclear energy plans.
The latest Snowy 2.0 business case shows that the storage value has increased significantly, thanks to increased generation volumes with a 10 percent capacity increase from 2000 megawatts to 2200 MW.
The increased generation volumes also reflect the greater penetration of wind and solar energy into the electricity grid, creating more opportunities to pump at low prices and generate at relatively higher prices during periods of high demand.
The combined effect was an increase in generation from an average of 3.5 terawatt hours per year to 5.3 TWh, and an increase in the average annual price difference between generation and generation from approximately $85 per megawatt hour to $100/MWh.
“Snowy 2.0 is now 57 percent complete and our workforce of 3,000 people is making good progress on the many construction fronts,” Barnes said.
Tunneling work through the project was 30 percent complete, he said, as the Australian government company is considering purchasing another machine.