Latest / The Front / The great Snowy squeeze: how the ‘world’s biggest battery’ got stuck

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The great Snowy squeeze: how the ‘world’s biggest battery’ got stuck · The Front

• 0:03
  Speaker 1: From The Australian, here's what's on the front. I'm Claire Harvey.
• 0:06
  Speaker 1: It's Thursday, October 15, 2026. The Victorian Liberal Party won't
• 0:14
  Speaker 1: sign preference deals with One Nation candidates before nominations for
• 0:17
  Speaker 1: the November state election close. The Libs are expected to
• 0:21
  Speaker 1: preference some members of Pauline Hanson's insurgent party, but leader
• 0:25
  Speaker 1: Jess Wilson wants her party to fight it out with Labor.
• 0:28
  Speaker 1: That story's live now at theaustralian.com.au. Snowy 2.0 was supposed
• 0:36
  Speaker 1: to be the world's biggest battery, the renewable energy dream
• 0:41
  Speaker 1: made real right here in Australia. But a decade of
• 0:44
  Speaker 1: catastrophic delays and blowouts have the whole project literally at
• 0:48
  Speaker 1: risk of getting squeezed to death by Australia's ancient geology.
• 0:53
  Speaker 1: And now the Australians revealing the Commonwealth government considered sacking
• 0:57
  Speaker 1: the builder that was meant to save this enormous project.
• 1:01
  Speaker 1: Our chief business correspondent, Perry Williams, is here in just
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  Speaker 1: a moment.
• 1:08
  Speaker 2: This is a very romantic story in many ways. Snowy
• 1:12
  Speaker 2: Hydro 2.0 is the biggest battery ever built in Australia.
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  Speaker 2: It will make renewables reliable.
• 1:19
  Speaker 3: How long will it take to build this?
• 1:20
  Speaker 4: Six years type.
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  Speaker 2: Thing, you know.
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  Speaker 4: We thought we had something designed well. We thought we
• 1:24
  Speaker 4: had it costed well.
• 1:25
  Speaker 3: You're saying it's ten times more expensive than it needs
• 1:28
  Speaker 3: to be to produce the electricity we need.
• 1:30
  Speaker 4: Two thirds complete, this mega project is now chronically over budget.
• 1:38
  Speaker 2: These are big dreams in these mountains. Real courage. A
• 1:43
  Speaker 2: belief in the future. A confidence in Australia.
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  Speaker 1: I think we've all had the experience of standing with
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  Speaker 1: a builder on a building site and he starts saying, well, mate,
• 1:57
  Speaker 1: it's a different kind of rock to what we thought
• 1:59
  Speaker 1: it was, so it's going to cost a lot more money. Perry,
• 2:01
  Speaker 1: that is happening on a giant scale to Snowy Hydro 2.0.
• 2:07
  Speaker 1: What is the fundamental problem with the rock in the
• 2:10
  Speaker 1: Snowy Mountains that is causing all this drama?
• 2:13
  Speaker 3: Yeah, we've all watched our fair share of grand design shows.
• 2:16
  Speaker 3: We know the moment that's coming and Look, Snowy 2.0,
• 2:19
  Speaker 3: this is on a grand scale. And what's happened is
• 2:23
  Speaker 3: it is some of the most challenging geological conditions, mostly
• 2:27
  Speaker 3: because it's not all the same. So as you kind
• 2:31
  Speaker 3: of move through the different rock types, the different terrain,
• 2:35
  Speaker 3: it's required slight tweaks to these massive tunnel boring machines. TBMs,
• 2:41
  Speaker 3: they've even got names, one called Florence, infamously. So They've
• 2:46
  Speaker 3: really struggled with the terrain. And the problem is, kind
• 2:50
  Speaker 3: of stating the obvious, if one of these big machines
• 2:53
  Speaker 3: gets stuck halfway through doing a tunnel, A, it's very expensive,
• 2:58
  Speaker 3: and B, it's a very long process to get them repaired,
• 3:02
  Speaker 3: get them out of there, and even to get another
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  Speaker 3: tunnel boring machine, normally from Europe, to come over and
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  Speaker 3: replace it. So it's frankly a bit of a nightmare.
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  Speaker 4: Florence, one of the four tunnel boring machines, was stuck
• 3:16
  Speaker 4: for 11 months when she caused a sinkhole just 150
• 3:21
  Speaker 4: metres into the dig.
• 3:25
  Speaker 1: I love our job because we get the opportunity to
• 3:27
  Speaker 1: dig into something that's interesting that would be completely irrelevant
• 3:29
  Speaker 1: for most people's work days. I've been reading about the Gondwana,
• 3:33
  Speaker 1: the ancient supercontinent, and the formation of the Lachlan Fold Belt,
• 3:37
  Speaker 1: which is the kind of rock that is basically southern
• 3:40
  Speaker 1: New South Wales, Victoria area, And the Snowy Mountains. It's
• 3:43
  Speaker 1: the rock that famously included the gold deposits that brought
• 3:47
  Speaker 1: the gold rush to Australia. But in the Snowy Mountains,
• 3:50
  Speaker 1: there's a fault called the Long Plain Fault Zone, which
• 3:55
  Speaker 1: is a different kind of rock. And that's the problem,
• 3:58
  Speaker 1: isn't it? Because when a tunnel boring machine gets into
• 4:01
  Speaker 1: this different kind of rock, instead of it being nice,
• 4:03
  Speaker 1: stable granite, it's kind of potentially mushy in parts and
• 4:08
  Speaker 1: can squeeze in.
• 4:09
  Speaker 3: Yeah, yeah, definitely. And look, they knew about these conditions
• 4:13
  Speaker 3: going into this Snowy Hydro, Snowy 2.0 as it's known,
• 4:18
  Speaker 3: which essentially is an expansion project on the original. But
• 4:22
  Speaker 3: it's one thing to do your planning, your contingency and
• 4:26
  Speaker 3: so on. It's another to actually, you know, have to
• 4:28
  Speaker 3: deal with the kind of real life conditions. And it's
• 4:32
  Speaker 3: probably worth remembering like the original Snowy, which obviously is
• 4:35
  Speaker 3: a lot larger than this Snowy 2.0 expansion. They spent
• 4:40
  Speaker 3: nearly 20 years building it. Of course, they didn't have
• 4:43
  Speaker 3: all the modern machines we had, but they had thousands
• 4:45
  Speaker 3: of workers as well working on that original scheme.
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  Speaker 2: This was the result of the vision and the courage
• 4:52
  Speaker 2: of the generation that won the Second World War. They
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  Speaker 2: defended our freedoms, saved us, and they came home and
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  Speaker 2: they built this.
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  Speaker 3: So they're actually trying to do this expansion at kind
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  Speaker 3: of breakneck speed, relatively, and it's just encounter problem after
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  Speaker 3: problem again. I reckon they'll get there eventually, but it's
• 5:13
  Speaker 3: been a really painful process.
• 5:18
  Speaker 1: I played you at the start of this episode, Malcolm
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  Speaker 1: Turnbull talking back in 2017 when he was introducing this
• 5:24
  Speaker 1: idea to the Australians, describing it as romantic. And it is.
• 5:27
  Speaker 1: It's magic, isn't it, pumped hydro? A low lake and
• 5:31
  Speaker 1: a high lake pumping the water up when energy is cheap.
• 5:35
  Speaker 1: and then letting it flow back down and turn the
• 5:37
  Speaker 1: turbines in an underground power station when energy is expensive
• 5:41
  Speaker 1: or when you need extra baseload power. that idea, does
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  Speaker 1: it still hold true as the kind of transformative thing
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  Speaker 1: that would make renewables economically effective, Perry?
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  Speaker 3: Yeah, look, I think there's definitely still a case for
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  Speaker 3: Snowy 2.0 and for Pumped Hydro. The problem is just
• 6:00
  Speaker 3: getting these massive projects built. The real value of the
• 6:05
  Speaker 3: project is its size. So Everyone probably knows about the
• 6:09
  Speaker 3: battery boom. You know, a lot of people getting batteries
• 6:11
  Speaker 3: in their homes. Obviously, we've got these large scale batteries.
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  Speaker 3: This is kind of the ultimate big battery. It's a
• 6:18
  Speaker 3: water based battery and it's probably twice the size of
• 6:22
  Speaker 3: the next biggest battery in Australia. So it's kind of
• 6:25
  Speaker 3: sheer scale means it is really valuable. But as we're discussing,
• 6:30
  Speaker 3: all the problems that have gone along with it means
• 6:32
  Speaker 3: you can't just construct one of these pumped hydro stations
• 6:35
  Speaker 3: that stand by your fingers. There's another one being built
• 6:37
  Speaker 3: up the top end of Australia and a couple more
• 6:41
  Speaker 3: being built elsewhere internationally, obviously China as well. But they're
• 6:45
  Speaker 3: not easy things to get off the ground.
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  Speaker 1: That's another thing you don't want to hear the builder say, oh,
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  Speaker 1: we've never done this before.
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  Speaker 3: Well, look, it's had a bit of a checkered history.
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  Speaker 3: Malcolm Turnbull had high hopes for it. $ 2 billion was
• 6:58
  Speaker 3: the initial budget put on it. A colleague, Nick Evans,
• 7:01
  Speaker 3: and I have been following it for quite a few
• 7:03
  Speaker 3: years now. There was actually a big drama with the contractor,
• 7:07
  Speaker 3: the original contractor, Clough, which went bust and ultimately got
• 7:11
  Speaker 3: bought out by WeBuild, a big Italian contractor, which this
• 7:15
  Speaker 3: is now one of their sort of mega projects in Australia.
• 7:18
  Speaker 3: I think they'll be wondering if they made the right
• 7:21
  Speaker 3: decision taking over this contract because it's caused all sorts
• 7:26
  Speaker 3: of problems for them.
• 7:26
  Speaker 1: That $ 2 billion is now potentially north of $ 40 billion
• 7:30
  Speaker 1: or maybe even more. Who knows as this tunnel boring
• 7:33
  Speaker 1: machine tries to get through that bit of rock. The
• 7:36
  Speaker 1: original boss of the company was Paul Broad and he
• 7:39
  Speaker 1: was there at the original press conference with Malcolm Turnbull
• 7:42
  Speaker 1: when Turnbull was saying very optimistically, this will be up
• 7:44
  Speaker 1: and running by 2021 and it's going to cost $ 2 billion.
• 7:48
  Speaker 1: Now Paul Broad has really turned on the Labor government
• 7:51
  Speaker 1: and is accusing them from outside of this project now
• 7:54
  Speaker 1: of having contributed to the problem. What is Paul Broad's
• 7:58
  Speaker 1: kind of main accusation, particularly against Chris Bowen?
• 8:01
  Speaker 3: Essentially, he's quite frustrated with the way it's been sort
• 8:05
  Speaker 3: of mismanaged, particularly that relationship with the contractor, Clough and
• 8:10
  Speaker 3: now WeBuild. Their contract essentially got sort of redesigned so
• 8:15
  Speaker 3: they were able to recoup more expenses and And the expenses,
• 8:20
  Speaker 3: as you just said, have absolutely multiplied. So often in
• 8:25
  Speaker 3: these contracts, you have a sort of fixed price style deal.
• 8:29
  Speaker 3: And this has caused a lot of drama because the
• 8:33
  Speaker 3: costs have been multiplying up. There's been a lot of
• 8:36
  Speaker 3: friction between Snowy and the contractor. I think that probably
• 8:40
  Speaker 3: goes to the heart of Paul Broad's concerns. You know,
• 8:43
  Speaker 3: you've had other changes. It actually used to be jointly
• 8:46
  Speaker 3: owned by the federal government, the New South Wales and
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  Speaker 3: the Victorian governments, between the three of them. Federal government
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  Speaker 3: now owns 100% of Snowy Hydro. So all of a sudden,
• 8:57
  Speaker 3: every decision they make is quite a big call. And,
• 9:00
  Speaker 3: you know, I think to your point, Chris Bowen's probably
• 9:03
  Speaker 3: feeling the heat on this.
• 9:08
  Speaker 1: The original Snowy Hydro started out in 1949. It was
• 9:12
  Speaker 1: a transformative project for Australia, brought wonderful waves of migrants here,
• 9:16
  Speaker 1: expert engineers from Europe and their families who've changed the country. Surely, though,
• 9:21
  Speaker 1: given that we've been working on Snowy Hydro for all
• 9:24
  Speaker 1: those years, someone should have done a proper geological assessment
• 9:26
  Speaker 1: before it was started. How can any of this be
• 9:29
  Speaker 1: a surprise?
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  Speaker 3: The original scheme is a marvel, I agree. I've spent
• 9:33
  Speaker 3: a few days there. I encourage everyone at some point
• 9:36
  Speaker 3: to go past the sheer scale of it is staggering,
• 9:40
  Speaker 3: stretches for miles and miles. It is really an engineering marvel.
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  Speaker 3: Where they're trying to take it to now should have
• 9:47
  Speaker 3: been more predictable. And I think there's going to be
• 9:50
  Speaker 3: a big inquest. The current tension that we're reporting on
• 9:54
  Speaker 3: is there's a line-by-line cost review, which has been commissioned
• 9:59
  Speaker 3: a year ago. would you believe, which we're still waiting
• 10:01
  Speaker 3: to come out. So that was essentially the Commonwealth government saying, hey,
• 10:06
  Speaker 3: we're really worried about costs, you know, tens of billions
• 10:09
  Speaker 3: of dollars. We build, as I said, went through line-by-line
• 10:13
  Speaker 3: accounting for everything. That's now gone to Snowy Hydro, and
• 10:17
  Speaker 3: Snowy Hydro will then hand that to Chris Bowen. The
• 10:20
  Speaker 3: energy ministers promised to release that by the end of
• 10:23
  Speaker 3: this year, but we hear that's a very fraught, tense process.
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  Speaker 5: When we came to office, we were advised very early
• 10:31
  Speaker 5: on coming to office that Snowy 2.0 was a deeply
• 10:34
  Speaker 5: troubled project. And most importantly, the Australian people hadn't been
• 10:38
  Speaker 5: told just how troubled the project was.
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  Speaker 3: I think there's going to be probably conflict between Snowy
• 10:46
  Speaker 3: and the contractor. You know, I think at this stage,
• 10:48
  Speaker 3: they're just probably putting their heads down. and trying to
• 10:51
  Speaker 3: get the damn thing finished, but it has been problematic.
• 10:54
  Speaker 1: WeBuild has built a pretty impressive Australian business. They're working
• 10:58
  Speaker 1: on the Melbourne Suburban Rail Loop, on the Sydney Metro,
• 11:01
  Speaker 1: various other projects. Are we stuck with them now? And
• 11:04
  Speaker 1: would it be worth considering changing companies on the Snowy project?
• 11:08
  Speaker 3: We understand that Snowy Hydro has investigated whether to move
• 11:12
  Speaker 3: on from WeBuild, what their options are, As tempting as
• 11:15
  Speaker 3: that might be, we don't understand they'll go down that route.
• 11:19
  Speaker 3: I think it's one thing to change your builder halfway
• 11:22
  Speaker 3: through a house. This is one of, I mean, it's
• 11:24
  Speaker 3: Australia's biggest ever renewable energy project. The scale of it
• 11:28
  Speaker 3: is enormous. And there's probably only one or two other
• 11:32
  Speaker 3: companies of that scale in Australia who could take over
• 11:35
  Speaker 3: as contractors, thousands of really specialized workers and so on.
• 11:40
  Speaker 3: So I think they'll probably stick with them. But, you know,
• 11:45
  Speaker 3: I do suspect there's going to be more drama to
• 11:47
  Speaker 3: play out.
• 11:54
  Speaker 1: When you and I are old, are we going to
• 11:56
  Speaker 1: look back on this as a wonderful asset that Australia
• 11:59
  Speaker 1: gained for a bit more money than we thought? Or
• 12:02
  Speaker 1: are we going to look at it as a total
• 12:04
  Speaker 1: catastrophe that never turned out?
• 12:06
  Speaker 3: I think it'll be a valuable asset. asset in Australia's
• 12:11
  Speaker 3: energy grid, but at what cost? You know, I think
• 12:13
  Speaker 3: the critics are quite justified in asking, we don't know
• 12:18
  Speaker 3: what the final bill is going to be, you know, $ 30,
• 12:20
  Speaker 3: $ 40 billion. What else could we have spent that money on?
• 12:23
  Speaker 3: Other technologies, other pumped hydro schemes, to be honest, there's
• 12:28
  Speaker 3: all sorts of things. And don't forget, this is, you know,
• 12:30
  Speaker 3: taxpayer money. So like quite a few of the Labor
• 12:34
  Speaker 3: administration's energy policies, it's sort of well-meaning, but the actual
• 12:40
  Speaker 3: implementation and the rocky road on this energy transition really
• 12:44
  Speaker 3: sort of demands some more examination. I'm sure in decades
• 12:49
  Speaker 3: to come, it'll be going, it's going to last for 100,
• 12:52
  Speaker 3: 150 years, but I think it's going to be at
• 12:54
  Speaker 3: an eye-watering cost.
• 12:59
  Speaker 1: Perry, thank you very much.
• 13:00
  Speaker 3: Thanks very much.
• 13:06
  Speaker 1: Perry Williams is The Australian's Chief Business Correspondent. You can
• 13:09
  Speaker 1: read all Perry's incredible scoops about Snowy 2.0 and everything
• 13:14
  Speaker 1: else anytime at theaustralian.com.au.