Increased bill reductions to flow from SA-NSW electricity interconnector

8th October 2020

South Australian electricity customers can expect even greater savings from the proposed new interconnector between South Australia and New South Wales.


According to updated independent modelling, South Australian households can expect to save an average of $100 per year once the new interconnector, called Project EnergyConnect, is complete while businesses can also expect higher savings, proportional to their energy use.


ElectraNet Chief Executive, Steve Masters, said an updated cost benefit analysis report submitted to the AER confirms that the proposed interconnector with New South Wales provides power consumers with the greatest benefits.


“This report was undertaken by ElectraNet to ensure no stone was left unturned in determining that this project is a good investment for electricity customers in South Australia and New South Wales,” Mr Masters said.


“It shows that Project EnergyConnect will deliver cheaper electricity, more renewable energy and is an important measure to addressing emerging security risks in the network.


“Since we completed our original analysis on this project, there has been significant changes to the energy market and the cost of transmission across the National Electricity Market (NEM).


“At an updated project cost of $2.4 billion, the cost benefit analysis shows Project EnergyConnect continues to deliver positive net market benefits and remains the preferred option to satisfy the requirements of the AER.


“More renewable energy will be unlocked as result of the project, resulting in further downward pressure on prices.


“Project EnergyConnect is also expected to create hundreds of jobs during construction and during the life of the project in both South Australia and New South Wales.”


As the final step in the regulatory approval process, ElectraNet has lodged a Contingent Project Application with the Australian Energy Regulator seeking the funding to deliver the South Australian component of the project. A corresponding application has been lodged by TransGrid for the New South Wales component of the project.


The Australian Energy Market Operator considers Project EnergyConnect to be an “essential foundation measure to addressing the emerging system security risks” to the electricity network.


ElectraNet continues to welcome support from the South Australian and Commonwealth Governments for this project.




Project EnergyConnect (PEC) is the proposed, new, 330-kV electricity interconnector between Robertstown, in South Australia, and Wagga Wagga, in New South Wales, that also includes a short 220-kV spur from Buronga, in New South Wales, to Red Cliffs in northwest Victoria.


In 2016, ElectraNet began exploring options to reduce the cost of providing secure and reliable electricity, enhance power system security in South Australia, and facilitate the long-term transition of the energy sector across the National Electricity Market (NEM) to low emission energy sources.


South Australian transmission network owner ElectraNet and New South Wales transmission network owner TransGrid have lodged their contingent project applications (CPA) with the AER to secure the funding to deliver Project EnergyConnect.


In preparation for the final regulatory stage, ElectraNet has consulted widely with energy market and consumer stakeholders on the extensive analysis undertaken to validate the project’s benefits to consumers and the broader electricity market, taking into account the increased costs to construct the interconnector since it was first proposed. ElectraNet has aligned its updated cost benefit analysis with data in the Australian Energy Market Operator’s (AEMO) recently released 2020 Integrated System Plan (ISP) as well as emerging system security issues in South Australia.


The updated cost benefit analysis shows Project EnergyConnect is still expected to deliver positive market benefits and remains the preferred option to satisfy the requirements of the AER.


If approved by the AER, Project EnergyConnect will:

·        Reduce electricity prices and affordability concerns for SA and NSW customers through greater energy supply from a diversity of renewable sources and increase competition

·        Unlock new renewable energy generation development along the interconnector route

·        Lead to greater sharing of energy reserves, providing NSW with access to renewable generation as coal is retired

·        Reduce SA’s vulnerability to extreme weather events and system disturbances

·        Provide SA renewable energy generators with more opportunities to export power interstate when demand is lower in SA

AEMO’s recently released roadmap for securing the NEM, the 2020 ISP, lists Project EnergyConnect as an “actionable” or key project for the SA energy market finding the project would deliver a wide range of market benefits.


Although this is the final regulatory approval stage for Project EnergyConnect, further development and environmental approvals, which are standard for construction projects, are still required. ElectraNet is jointly delivering this project with TransGrid, the manager and operator of the high voltage electricity transmission network in NSW.


The RIT-T is the economic cost benefit test that is overseen by the Australian Energy Regulator (AER) and applies to all major network investments in the NEM. On 24 January 2020, the AER approved the RIT-T describing the business case for project as “robust” and determining that the proposed interconnector remained the most “credible option that maximises the net economic benefit” in the NEM, ultimately benefiting electricity customers.   

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