Snowy 2.0: Inside the disastrous renewable energy project that’s blown out in cost by $10BILLION after it was plagued by sinkholes, gas leaks and flooding

The ‘complex’ Snowy Hydro 2.0 project continues to face delays, months after a sinkhole and gas leak caused operational problems.

ABC’s Four Corners program revealed on Monday that the $2 billion project, which has since been inflated to $12 billion, has suffered a number of safety and operational delays.

The use of a $150 million, 400-ton drill called Florence has caused chaos for workers and planners in recent months.

The tunnel project, which aims to dig the 15-kilometer journey under the Kosciuszko National Park, was launched in March 2022.

Four Corners reported Monday that Florence has completed only 500 feet since the project began, due to geotechnical problems workers encountered when they encountered soft ground 300 feet into the excavation.

The stalled project has added another $2 billion to the budget crisis, according to Four Corners.

Despite initial concerns, the project went ahead when the machine became bogged down by water and soft ground.

“We pushed forward 50cm and spent the next week cleaning up all the mud and water around the tunnel boring machine,” one worker told Four Corners.

“Sometimes there was 10 to 4 feet of water around the machine.”

To ensure the project could proceed, so-called ‘slurry system’ equipment was ordered, but it was designed based on inappropriate models.

Snowy Hydro CEO Dennis Barnes, who was appointed in February, told a Senate hearing on Monday that Florence’s machine continued to operate despite the difficulties it had encountered.

“Since Florence experienced this soft surface in November 2022, there has been no sense in which the machine has somehow not been able to move forward,” Mr Barnes said.

‘The manure processing installation has indeed been moved 10 meters.

‘It doesn’t get stuck, it can move.’

Mr Barnes admitted he was naive when he took on the project earlier this year and told an earlier Senate inquiry that the project would start sooner rather than later.

“I’m sorry I underestimated the Florence restart… it was much more complex than I expected,” he said.

A sinkhole was also opened at the project just before Christmas.

Mr Barnes said this sinkhole was just outside the development boundary.

The tunnel also filled with toxic gas in July while work was underway in an attempt to stabilize the ground around the Florence machine.

Mr Barnes said the Senate estimates this was caused by a chemical reaction that produced isocyanate, a dangerous chemical.

SafeWork NSW told Four Corners that the gas posed a ‘serious imminent risk’ to ‘health and safety’ and branded the Snowy 2.0 project as having ‘insufficient control measures… to prevent exposure to a harmful substance’.

The project had also received a number of fines from the NSW Environment and Heritage Department.

Mr Barnes said the project is working with the State Government to meet its compliance obligations and assured the Senate hearing on Monday that the project is about 40 per cent complete.

“This is a complex project with many hazards,” he said.

Mr Barnes said while “immature design and geotechnical issues” had initially added to the budget crisis, the project was still important to Australia.

“The market really needs this asset and I would characterize this as a good thing for the Australian market,” he said.

“We used third-party models and found that in addition to the $12 billion, there is still a $3 billion value (estimated portfolio value).”

Snowy 2.0 has been proposed as a crucial driver for the transition to renewable energy sources and will aim to create enough clean energy to power half a million homes.

In June, $4.3 billion was spent on the project and it is expected to be fully operational by the end of 2028.