Snowy 2.0: Florence Resumes, but Challenges Remain

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Snowy 2.0: Florence Resumes, but Challenges Remain

After a challenging year stuck in soft ground, the tunnel boring machine known as Florence has resumed its progress in the Snowy 2.0 hydropower project. Florence is responsible for excavating the longest tunnel in this ambitious project, which aims to create a massive water battery for Australia's energy grid.Despite Florence's return to operation, the journey is far from over. The machine is currently progressing slowly, cutting through hard rock at a rate of two meters at a time. Each excavated section requires the installation of nine concrete segments to line the tunnel, followed by the movement of a complex system of equipment.While Florence's progress has improved, it remains insufficient to meet the project's tight schedule. To catch up, Snowy Hydro and Future Generation are considering working on both ends of the headrace tunnel simultaneously. This could involve purchasing a fourth tunnel boring machine or using an alternative "drill and blast" technique.The challenges faced by Florence have highlighted the shortcomings of Snowy 2.0's previous contract arrangements. Under the old terms, the joint venture partner bore the majority of the financial risks. This led to a strained relationship and hindered progress. The current incentivized target cost approach, where both Snowy Hydro and Future Generation share the cost overruns, has fostered greater collaboration and revived the project.Snowy 2.0 has encountered significant cost overruns, with the project now estimated to cost $12 billion, six times its initial budget. The Commonwealth government, as the sole shareholder of Snowy Hydro, has committed to additional financial support.Despite the setbacks and escalating costs, Snowy 2.0 remains critical for Australia's energy future. Its 2,200 megawatts of power will complement intermittent renewable energy sources and provide a flexible and reliable supply. The project also benefits from environmental and economic factors, making it imperative to complete.