The run-of-river hydro power plant of Lavey, situated in the Western part of Switzerland, is an important source of renewable energy for the city of Lausanne. With its annual production of roughly 400 GWh it covers approximately a third of its consumptions per year. Even given the relatively short distance of 4 km between its water intake and power plant, the total head of the hydroelectric development is still roughly 40 meters and with the design flow given at 200m3/s, the installed power is considerable. To increase the energy production of the power plant, an extension project has been proposed. It includes the construction of a second head race tunnel and the extension of the existing underground cavern for the installation of an additional turbine group. This would allow for a bigger volume of water to be used for electricity production, as well as optimize the operation of the plant by reducing energy losses and giving it better flexibility and a wider range of operation. The excavations of underground structures such as the large diameter head race tunnel, the vertical pressure shaft and the extension of the existing cavern, represent big challenges from an engineering point of view and the planning and design of such underground works require a pluri-disciplinal approach. This study focuses on the geotechnical aspects which need to be considered during the excavation of these underground cavities. Moreover, it outlines the challenges and constraints originating from the fact that the construction of the new power plant is to be done during normal operation of the existing scheme. These analyses allow to stress the importance of a sound planning process including the determination of the excavation methods to be used and the excavation sequences in a project of such magnitude and complexity.