Energy regulator probe a challenge for Victorian electricity grid expansion
A $370m expansion of Victoria’s electricity grid faces a challenge with the national energy regulator investigating a potential breach of rules.
A $370m expansion of Victoria’s electricity grid to ease renewable energy bottlenecks faces a challenge with the national energy regulator investigating a potential breach of electricity rules following complaints from a major community group.
The Australian Energy Market Operator, which runs the nation’s power grid, has proposed “urgent” transmission investment in western Victoria over concern that the state’s existing network will fail to cope with a surge in clean-energy supplies, potentially sparking a long-term price jump for users.
Up to 6000 megawatts of large-scale wind and solar generation will enter the grid in a decade, with a third of that supply due to come online by next year, driven by an increase in the state’s renewable-energy target to 50 per cent by 2030.
However, the Moorabool Central Highlands Power Alliance — an alliance of 10 community groups whose members live near the proposed powerline expansion — have written to the Australian Energy Regulator over three alleged breaches of national electricity rules during AEMO’s regulatory test for the Western Victorian Transmission Network Project.
The alliance alleges AEMO’s regulatory investment test was flawed because it failed to properly evaluate all credible options for the project.
It also asserts that when AusNet was contracted to deliver the project, it had not identified a specific corridor for the project and therefore could not have conducted detailed technical investigations required by national rules.
“Unlike renewable projects, which our communities support, AEMO has completely failed to earn any semblance of a social licence for this project,” alliance chair Emma Muir said in the letter. The rules “do not preclude AEMO from obtaining such a licence to ensure fair and equitable outcomes are achieved in the best interests of all Victorians, including our regional communities. However, the regulatory process does require that AEMO give any consideration to the effect that each credible option will have on the landowners, communities and environments in its path.”
The AER said it was seeking information from AEMO as part of its investigation.
“The AER is currently considering issues raised in that letter, which require further analysis and additional information from AEMO regarding the Regulatory Investment Test for Transmission process and analysis undertaken for the Western Victorian Transmission Network Project,” it said.
The plan for western Victoria envisages major transmission works including a new terminal station north of Ballarat and long-distance voltage lines between Bulgana and Sydenham, with the final component not due in place until 2025. AEMO has been clamping down to ensure new renewable projects do not lead to further congestion issues after rapid growth in wind and solar projects in areas not always close to existing transmission.
It sees a pressing need for major investment in transmission as the power grid moves away from a reliance on coal generation to wind, solar, pumped hydro and gas.
AEMO warned last year of new market risks from the retirement of coal-fired power plants in Victoria that could require a bigger shift to renewables and increased transmission links with NSW to ensure stable supplies.
Federal Energy Minister Angus Taylor said in 2019 the state government had been reckless and failed to properly prepare for how the state’s stretched power grid would handle major new renewable generation sources in areas of the state without sufficient transmission capacity.
Victoria has a 50 per cent renewable target by 2030 and also aims to be net zero emissions by 2050. A decision on an interim emissions target was due to be set by March and tabled in parliament by August. However, in July it was delayed with COVID-19 cited as the reason.
The state has previously been linked to a reduction in pollution of 45-60 per cent by 2030 following recommendations from an independent expert panel chaired by former Labor minister Greg Combet.
State Energy Minister Lily D’Ambrosio is now finalising interim targets for 2025 and 2030.
Australia requires at least 30,000MW of solar and wind to replace coal generation by 2040 and 47,000MW should more aggressive pollution cuts be required in response to the climate change crisis, AEMO data shows.
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