Electricity bills set to jump as problems with building new transmission lines raise concerns about energy security

Victorians are set to be stung with higher electricity bills because of major delays building the state’s multibillion-dollar high-voltage powerline network.

Victorian households face electricity bill hikes of $104 a year due to major delays building the state’s multibillion-dollar high-voltage powerline network.

Modelling supplied to the Andrews government in 2022 showed that Victoria would cop the highest costs for delays to the expansion of the grid, which is needed to plug in more renewable energy.

This week it was revealed that a major transmission project in the state’s west, called VNI West or KerangLink, would open in 2030 rather than 2028 – the year the Yallourn power station is due to close – as planned.

Victoria is set to cop the highest costs for delays to the expansion of the grid.

It followed a series of delays and cost blowouts on four other construction projects that connect transmission lines in Victoria, South Australia, Tasmania and NSW.

The secret government modelling obtained by the Herald Sun shows that delays of two years on transmission upgrades would cost households the most – $104 a year or a “cumulative impact” of $1556 over 15 years.

Problems with building new transmission lines, which will act like an extra generator once brown coal-fired power stations start to close in 2028, has raised concerns about energy security and whether the state can reach its renewable energy targets.

It has also raised the prospect that gas-fired peaking stations will become more critical to keeping the lights on.

There have been delays and cost blowouts on multiple construction projects that connect transmission lines in Victoria, South Australia, Tasmania and NSW.

Australian Industry Group’s climate change and energy director Tenant Reed said some fat had been built into transmission project opening dates by market operators but the pace of building VNI West had been “horrifyingly slow” to ­insulate the project from legal challenges.

“We need to make decision-making processes go faster,” he said.

“The costs of not building will sheet home to all of us.”

This week it was revealed that new payments worth up to $46,000 a hectare were likely to be offered to angry landholders around the VNI West in a bid to get the troubled project back on track.

Opposition energy spokesman David Davis said the botched rollout of renewables would leave Victoria exposed and households and businesses to “pay the price through a surge in electricity bills”.

“Even renewable groups have begun to point out the ­increased uncertainty inherent in Labor’s shambolic process of declaration of renewable ­energy zones and rollout of an expanded grid,” he said.

David Davis said Victorians would pay the price through a surge in electricity bills. Picture: Andrew Henshaw

A government spokeswoman said new transmission projects were critical to delivering reliable and affordable power to homes and businesses as coal power plants retired.

She said the market operator had “indicated the revised project timeline (for VNI West) will not impact the reliability of Victoria’s electricity network”.

“The benefits of building these new transmission lines for customer bills far outweigh the costs,” she said.

“The agreement with EnergyAustralia is to close Yallourn in 2028, and that plan has not changed.”

Originally published as Electricity bills set to jump as problems with building new transmission lines raise concerns about energy security