Power dictate: D’Ambrosio adds $154m to NSW VNI West route

Victorian Energy Minister’s order adds $154 million to the cost of building transmission lines across NSW, affecting hundreds more landholders.

NSW landholders and electricity consumers are paying the price of Victorian Energy Minister Lily D’Ambrosio’s orders, which dictate a longer and more costly VNI West route.

Victorian Energy Minister Lily D’Ambrosio has added 32km to the NSW leg of the controversial VNI West project, affecting hundreds more properties and adding $154 million to the cost of building the 1500kV transmission line across the Riverina.

Ms D’Ambrosio’s ministerial orders from February and May have directed the Australian Energy Market Operator to select a route for the controversial Victoria-NSW Interconnector West that bridges the Murray River near Murrabit, 100km downstream of the preferred and least-cost crossing at Echuca-Moama.

But it is only now that the cost of these orders has come to light, following Transgrid’s release of the NSW routes, showing the Murrabit crossing increased the VNI West line length in the Riverina from 184km to 216km, adding 32km to the route and $154m to the cost, given construction and landholder compensation is $4.8 million per km.

NSW Farmers energy transition spokesman Reg Kidd said:“It’s frankly unbelievable that a Victorian Minister can dictate what happens on NSW farming land, and add extra costs to power bills in our state.

“This supposed nation-building power project is increasingly looking like it’s been drawn up on the back of a beer coaster and is being adjusted on the fly to suit the whims of whoever’s holding the pen.

“There’s barely any genuine consultation for the landholders who are in the firing line for these developments, and the fact that we’re learning about this from media and not the government or developers says a lot about how the process has been handled.

“Just who is in charge of who here – is this a national project or simply a case of Victoria serving its own interests?”

The original preferred route of VNI West has been dumped for a longer and more costly option.

The Australian Energy Regulator, an arm of Australia’s Competition and Consumer Commission, has demanded to know why AEMO selected the longer route ahead of others, including what it called the “preferred option”, from Waubra to Echuca-Moama and on to the Dinawan Energy Hub, north of Jerilderie.

The AER called on AEMO to explain why it did not further consider four other options, including the Waubra route, “which was identified in the February consultation report as the preferred option that maximises the positive net economic benefits to those who produce, consume and transport in the National Electricity Market”.

AER also demanded AEMO explain why its analysis “provides limited analysis of the NSW component of the VNI West project” and details on why it selected “routes between Dinawan and the Murray River crossing points”, along with details of the cost-benefit analysis.

AEMO finally responded to the AER last Friday, issuing a compliance report stating its route selection was undertaken in accordance with the National Electricity Rules, “subject to the orders made by the Victorian Minister for Energy and Resources”.

Ms D’Ambrosio’s May order states: “I have decided to make this Order to specify Option 5A (the Murrabit crossing) as a specified augmentation for the purposes of the Act”, based on AEMO’s advice.

Landholders on both sides of the border have been left frustrated and angered, with what one called arguments that looked like a “snake eating its tail”.

When asked who was ultimately responsible for the decision to pursue Option 5A, AEMO or Minister D’Ambrosio, a Victorian Government spokeswoman said “The Minister accepted AEMO’s recommendation and issued a Ministerial Order allowing AEMO to carry out early works, including further community consultation.”

The 2000 members of the Moorabool Central Highlands Power Alliance have lodged a dispute with AER over AEMO’s selection of the Murrabit route, highlighting a long series of contradictory VNI West route costings, which now included a $315m upgrade of the Western Renewable Link from its existing 220kV capacity to 500kV.

Alliance vice-chair Vicki Johnson said: “The costs of both projects have been considerably increased and will add to the already high costs that Victorian and NSW consumers will have to pay off over the next few decades”.

The alliance argued the selection of the final route does not comply with the national electricity rules, that demand transmission project selection “maximises the present value of net economic benefit to all those who produce, consume and transport electricity in the market”.

Evidence of the blowout in the cost of delivering VNI West can be seen in the fact that in:

JUNE 2022: AEMO releases its Integrated System Plan stating the VNI West would deliver “a new high capacity 500 kV double-circuit transmission line to connect Western Renewables Link (north of Ballarat) with Project EnergyConnect (at Dinawan) via Kerang, costing $491 million (stage 1) and $2.5 billion (stage 2)” – a total of $2.991 billion for what became known as option one.

JULY 2022: AEMO releases its VNI West Project Assessment Draft Report revising the cost of option one to $3.256 billion, stating it is “the preferred option” and “is robust to a range of sensitivity tests”.

DECEMBER 2022: AEMO issues VNI Project Update stating it was “embarking on an investigation of alternative VNI West options”.

FEBRUARY 2023: Minister D’Ambrosio issues an order directing AEMO to explore other options and AEMO produces its VNI West Consultation Report that abandons the north Ballarat option one route in preference for a $315m upgrade of the WRL from 220kv to 500kV) and building VNI West from Bulgana to the Echuca-Moama crossing at a cost of $3.282 billion.

MAY 2023: Minister D’Ambrosio issues another order directing AEMO to abandon all options crossing the Murray River at Echuca-Moama and opt for the Murrabit route, raising the cost to $3.499 billion.

All up AEMO’s repeated changes and Minister D’Ambrosio’s orders have added $508m to the original $2.991 billion cost of VNI West.

Originally published as Power dictate: D’Ambrosio adds $154m to NSW VNI West route