ElectraNet revenue proposal for 2024-28 includes $832m capex, and flags future $660m

Hundreds of millions of dollars needs to be spent on South Australia’s ageing electricity network – here’s how much it will cost you.

Hundreds of millions of dollars needs to be spent on maintaining South Australia’s ageing electricity network – including $35m to reduce the risk of people climbing up towers, transmission company ElectraNet says.

A further $4.5m will need to be spent to stop large birds being electrocuted and set alight.

The company has also flagged potential spending of up to $660m in the near future to accommodate more renewable energy coming into the system.

“Providing SA homes and businesses with a reliable and affordable power supply in a rapidly changing electricity network is critical to ensuring the lights stay on,” ElectraNet chief executive Steve Masters said.

“SA’s world-leading amount of renewable energy generation is creating a big change to how our network is used as electricity that was previously sourced from large generators is replaced by wind, solar and battery power.

“The growth in renewable energy is putting pressure on the network to move electricity back and forth between regions, which is pushing the network beyond its technical limits.

“This is a growing and ongoing challenge that must be satisfactorily managed.”

ElectraNet’s spending needs approval from the Australian Energy Regulator, which makes assessments in five year blocks.

Negotiations have begun for the period of July 2023 to June 2028. Consumers ultimately pay for the approved expenditure with transmission costs making up about 10 per cent of an average residential electricity bill.

ElectraNet is consulting publicly about its plans, ahead of a formal submission to the Australian Energy Regulator in January.

Steve Masters, chief executive of transmission company ElectraNet. Picture: Chris Russell

ElectraNet proposes $832m in capital expenditure, a 41 per cent decrease on the current five-year period where the company has been investing in the SA-NSW interconnector, upgrading the Eyre Peninsula lines and purchased synchronous condensers to stabilise the grid.

Of the total, $524m would be for maintenance and $139m for safety and security improvements.

Maintenance is essential with 40 per cent of transmission towers, 30 per cent of conductors and 20 per cent of transformers still in operation despite being older than the usual life for those assets.

On safety, 60 per cent of transmission towers were built before the late 1960s when it became standard to include barbed wire, spikes and other measures to stop people climbing up them.

Retrofitting towers close to towns, main roads and tourist spots would cost $35m.

A further $4.5m is being requested to insulate parts of certain transmission towers to stop large birds being electrocuted and being set alight.

This phenomenon caused four bushfires from 20 incidents over a ten-year period in SA when the flaming birds fell to the ground.

“Fortunately, none of those fires was particularly serious,” ElectraNet said, but added a similar incident caused a significant fire in the ACT.

SA has one of the oldest transmission grids in Australia.

ElectraNet will spend $457m as its share of the $2.3bn interconnector to NSW which was approved by the AER in June. NSW partner TransGrid will pay $1.8bn.

Looking ahead, ElectraNet says in its 2024-28 revenue proposal that further investments may be needed, especially after the interconnector, called Project EnergyConnect, is in place.

Most of these projects would not be needed until after 2028 but early indications are:

UP to $150m to increase capacity on the interconnector to reap the full market benefits of cheap renewable energy once future wind and solar are developed.

UP to $250m to link about 1000MW of new renewable energy in the Mid North to Adelaide and to the interconnector.

UP to $120m for stabilising the grid.

UP to $90m on the Eyre Peninsula to support new mining projects and the hydrogen industry.

UP to $50m to connect new renewable energy projects in the South East.

Mr Masters said the focus of the next five-year period would be on maintenance and refurbishment, rather than major new projects – resulting in the decrease in capital expenditure.

The transmission component of household bills would increase by a small amount of about $15/year because of Project EnergyConnect, the Eyre Peninsula upgrade and the synchronous condensers “but these projects are expected to deliver much greater offsetting savings in the energy component of electricity bills,” he said.