Buying local has limitations, concedes Transgrid CEO Brett Redman

Transgrid has been trying to ‘buy Australian’ to build its new electricity transmission lines but its chief executive concedes much of it will come from overseas thanks to supply constraints.

Transgrid chief executive Brett Redman. Picture: John Feder

Energy transmission company Transgrid has been using as many Australian-made products as it could to build its new electricity transmission lines, but supply constraints meant much of it would come from overseas, chief executive Brett Redman told a conference on Tuesday.

“I am a massive supporter of getting stuff done here and we are doing everything we can to order local,” Mr Redman told an energy conference in Sydney hosted by the Australian British Chamber of Commerce.

But he said the challenge for Transgrid, which operates the high-voltage electricity grid in NSW and the ACT, and is rolling out thousands of kilometres of new transmission lines in NSW to cater for the move away from coal-fired energy, was that it had to get its transmission lines built in the next few years and there was not enough local capacity available.

“The challenge is, with a timeline where we need to get things built in the next few years, how do you increase local capacity, in some cases 50-fold?” Mr Redman said.

“You’re really up against it.”

He said the recent purchases of high-voltage conductors by Transgrid would result in the bulk of the equipment coming from overseas, but that was only after the company had used up most of the capacity already in Australia.

He said Transgrid had gone to the one local transformer manufacturer in Australia asking it to supply more, but its order book was already so big it could not handle the extra work.

“Where ever we can, we try to sponsor local manufacturing to get more capacity in what we are doing,” he said.

But he said there hadn’t been a lot of new transmission lines being built in Australia in the recent past, which meant Transgrid had come “from a standing start” to having a significant amount of new projects on the books in a short period of time.

Meanwhile, the total amount of steel involved “just blasts through the total amount of production available in Australia”.

But Mr Redman said some of the manufacturing processes needed a “longer ramp” and Transgrid was having to make its orders now.

And the rolling out of new transmission lines was “at the front end of everything that’s happening” in the energy transition process in Australia.

“There is no transition without transmission,” he said.

Transgrid currently owns 13,500km of electricity transmission lines in NSW and the ACT.

Its new projects include a new line from the South Australian border to Wagga; HumeLink, which would go up past Wagga and the Snowy Mountains into the south of Sydney; and another connecting NSW with Victoria.

He said another that would connect Sydney with the Hunter was “close to being signed off” by the NSW government.

Mr Redman said Transgrid had to turn itself into a “mini-Transurban” in a few years because of the massive construction projects it was overseeing.

The company had increased its full-time equivalent staff from 1100 to 1700 people over the past 12 months, in addition to contractors.

Meanwhile, there were “social licence problems” around the world with the rollout of new electricity grids as part of the energy transition.

He said it was important to have high levels of community consultation for the projects.

The company was using seven to 10 years of repayable debt to fund the rollout without having to increase prices for consumers in the early years.