Extension cord connecting Victoria to Snowy 2.0 could be delayed

A five-year delay in connecting Victoria to Australia’s largest renewable energy project has been labelled “Russian roulette”.

Victoria will be cut off from Australia’s biggest renewable energy project for five years if the energy market operator follows through on its plan to delay building a $2.9bn extension cord.

From 2026, the Snowy 2.0 pumped hydro project is expected to be able to provide enough energy to power three million homes for a week.

But construction on the poles and wires to plug it into Victoria will start only in the same year under a proposal from the market operator that delays its completion from 2027 to 2031.

Snowy Hydro Limited boss Paul Broad blasted the idea, warning it would be “dangerous for consumers and industry” by risking higher power prices, more blackouts and slower decarbonisation.

He accused the market ­operator of “playing Russian roulette with (national electricity market) reliability and efficiency” after three years of “glacial progress” on transmission upgrades.

The market operator’s latest draft integrated system plan, released in December, pushed back the timeline for VNI West – the new interconnector between Victoria and NSW.

Plans to delay the building of a $2.9bn extension cord will cut Victoria off from the Snowy 2.0 project for five years. Picture: Alex Ellinghausen

Its 2018 plan had recommended VNI West be completed “as soon as practicable” by 2027-28 because it was the “preferred option to maintain system security and reliability in Victoria”, particularly with the impending closure of more coal-fired power stations.

Victorian Energy Minister Lily D’Ambrosio said she supported the new draft plan, and declared the state government’s investments in renewable energy and transmission upgrades would “ensure that Victorians continue to enjoy reliable and low-cost power supply”.

But Mr Broad questioned why the market operator’s 2018 assessment had changed given VNI West was the “single best asset for shoring up system security”.

He said it needed to be commissioned as soon as possible to maximise the benefits of Snowy 2.0 and unlock billions of dollars of investment in other Victorian renewable projects that could tap into the expanded transmission network.

The market operator’s plan forecast 60 per cent of power currently by produced by coal-fired power stations would be shut down by the end of the decade. Pressure is now mounting on the market operator to re-jig the plan before it is locked in by the end of June, especially given the retirement of three coal-fired generators have been fast-tracked since the draft was released.