Tunnel-boring machines deep underground at Snowy Hydro 2.0 are making "positive progress" after reports a sinkhole appeared in front of one called Florence and stopped excavation.
Updated costings won't be available until later this year with the project facing several issues, Snowy Hydro's new boss Dennis Barnes told a federal parliamentary hearing.
Mr Barnes said he has put the nation-building project on a more "realistic" footing that recognises the supply challenges that built up during the pandemic and the costs of construction.
"Clearly we would all prefer the project to be delivered as soon as possible," he told the senate estimates hearing.
"Positive progress on the project does continue," he said.
Issues with the project, including Florence, could put Australia years off course from its energy targets with the federal government aiming for 82 per cent renewable energy this decade.
The opposition has said Australia's energy reliability is under siege with Snowy's gas-fired Kurri Kurri power station also off track.
Kurri Kurri in the Hunter region has been delayed by one year to December 2024 and Mr Barnes said he was still confident about that time frame.
Quizzed about hydrogen suppliers for Kurri Kurri, he said the industry is still under development and the business case is under review.
Mr Barnes said the project "reset" would provide clarity to the federal government and enable appropriate planning for the national electricity market.
"We'll continue to work with our delivery partner - the Future Generation Joint Venture - to assess the required adjustment to project costing," he told the senate estimates hearing.
"And we'll provide an update once that is available, which we expect to be later in the year."
For his troubles, Mr Barnes will be paid an annual salary of $1.75 million, almost one third less than his predecessor, and performance pay of 40 per cent, officials said.
Earlier this month, Mr Barnes warned of up to two years of delays to the project, pushing the earliest start date out to 2028.
When first announced in 2017 it was to have been completed in four years.
The project is intended to operate as a massive battery by using excess wind and solar energy to pump water uphill before releasing it during peak periods to provide power to the national electricity grid.
Snowy Hydro 2.0 will connect two dams in southern NSW via almost 30km of tunnels and a new underground power station.
