Snowy Hydro is yet to identify the source of the green hydrogen that will eventually fuel the Hunter Power Project, a Senate Estimates hearing has heard.
In addition to setbacks associated with the plant's construction, a business case for using green hydrogen fuel at the plant remains incomplete.
Introducing a 30 per cent green hydrogen blend into the $600 million plant's fuel mix from the commencement of operations was a key pre-election commitment from Labor. The commitment was supported by an extra $700 million.
The government has acknowledged that the 30 per cent target was not realistic.
It has since stated that hydrogen will be introduced into the mix "as soon as practicable".
The divisive issue contributed to the departure of former Snowy Hydro chief executive Paul Broad last August after he expressed doubts about the feasibility of Labor's pledge.
Newly appointed Snowy Hydro chief executive Dennis Barnes told Senate Estimates on Monday that a business case for meeting the government's pre-election green hydrogen commitment was being developed.
"We have got teams working, it's well underway," he said.
The Newcastle Herald reported in December that a green hydrogen hub which is in development at the Port of Newcastle had been identified as a potential fuel source for the Hunter Power Project.
Significant pipeline infrastructure would need to be installed to meet the objective.
Meanwhile, the Hunter Power Project will not be fully operational until December 2024, more than 18 months after the closure of Liddell Power Station.
Mr Barnes confirmed on Monday that the project had been hindered by construction delays due to bad weather. He conceded there was no guarantee that costs and timelines would not blow out further.
The 660 megawatt gas generator was initially due to open later this year to help offset the closure of Liddell, which will close in April.
Mr Barnes said the generator would commence operating in a limited capacity using diesel fuel as early as May 2024.
"The good news is that all of the equipment is in the country, which significantly de-risks the project from here," Mr Barnes said.
"The challenges were the wet conditions on the site. I was there last week and we have now done the first pour of concrete which significantly de-risks the build. So we are actually making progress."
Snowy Hydro is yet to finalise the major works contract for the balance of the build.
A schedule and costs review is also underway.
Hunter-based Senator Ross Cadell, who questioned Mr Barnes, criticised the government's handling of the project.
"This government has taken a simple $600 million project to protect power supply by the end of this year and turned it into a $1.7 billion white elephant that won't be ready to fill the hole left by Liddell's closure this summer," he said.
"Good intentions don't keep the lights on and throwing more than a billion dollars of taxpayers money away to meet an uniformed and impractical election promise is criminal. There isn't a cent of other people's money Labor isn't willing to spend to look good."
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