Snowy Hydro: drilling confirmed halted on part of multibillion-dollar project after tunnel collapse

Snowy Hydro says work on a major part of its multibillion-dollar pumped hydro project remains halted after the collapse of a tunnel, adding to concerns the venture will face further lengthy delays.

She declined to detail how much of the 17km tunnel had so far been dug, and how long Florence would likely be stalled.

Snowy Hydro waited until late last year to inform the Australian Energy Market Operator (Aemo) that the project would be delayed a year until 30 December 2027. The company still states on its website that the first power is expect to be supplied in 2025.

The project aims to link two existing Snowy reservoirs by tunnels up to 27km in length.

A spokesperson for the climate change and energy minister, Chris Bowen, said Snowy Hydro had advised the government about the tunnel issues but said it was the latest hitch inherited from the previous Turnbull-Morrison government.

Another formidable challenge will be to build the extra transmission needed to carry power to Sydney in the north-east and Victoria to the south, he said, noting the first of several court cases against the connections will start next week.

Should the project be delayed significantly, or even cancelled, regulators will need to scramble to find alternative storage operations for the national electricity market. Smaller-scale batteries would likely be the quickest option to build, Mountain said.

Andrew Thaler, a local resident whose property is next to a plant making 7-tonne concrete segments meant to line the tunnels, says the impacts of the stalled drilling are evident.