Transgrid puts $10bn renewables rollout on fast track
The NSW power grid owner has vowed to beat an official timeline for building $10bn of transmission projects as it fast-tracks efforts to deliver renewables to the national electricity market.
NSW power grid owner Transgrid has vowed to beat an official timeline for building $10bn of transmission projects as it fast-tracks efforts to deliver renewables to the national electricity market.
Transgrid is developing three major transmission projects: EnergyConnect, which will move energy through NSW, South Australia and Victoria; the HumeLink connecting Snowy Hydro’s 2.0 hydro expansion to the network; and the southern transmission link to Melbourne, called VNI West, later this decade.
The Australian Energy Market Operator expects EnergyConnect online by 2024-25, HumeLink by July 2026 and VNI West by July 2031.
However, Transgrid chief executive Brett Redman said it can beat those earlier targets set out in AEMO’s electricity blueprint known as the integrated system plan.
“We believe we can beat the times compared with the ISP,” Mr Redman told The Australian. “EnergyConnect will be in 2024, HumeLink by the middle of 2026 rather than late 2026 and the big one is VNI West, which is 2028 rather than 2031 in the ISP.”
Transgrid is working on a plan to integrate the EnergyConnect, HumeLink and VNI West projects into a single program to save time and cut costs after last week completing a smaller upgrade of the Victoria-NSW Interconnector, VNI Minor.
“We think these are realistic targets which we can do if we bundle together and work smarter (on) the three projects and get our skates on,” Mr Redman said.
“We are close to placing large orders for equipment and the next big thing is to start to put in orders for critical and long-lead items to meet this big challenge of having transmission ready, so that we get renewables connected and beat coal closure.”
Transmission lags along with coal plant closures, rising demand and a gap in replacement generation sparked the market operator in August to call for an urgent response from industry to plug the supply shortage amid an escalating risk of blackouts.
The process of delivering major transmission projects through rural areas and amid landowner issues is widely expected to take longer than official timelines, constraining the volumes of clean energy that may be delivered to users in the market.
The Transgrid chief pointed to supply snags, landowner issues and financing as the three biggest hurdles faced by transmission developers.
“When we go to global suppliers we bring the biggest order book we can to compete with places like Germany and the UK, where they are trying to also build as fast as they can,” Mr Redman said. “The second big challenge is social licence because building transmission lines does impact landowners in a big way.”
He pointed to a NSW plan announced in late October for landowners to receive a $200,000-per-kilometre payment where pylons cross their land as a strong policy reform. “A doubling of compensation will help with the social licence challenge, even as we continue to consult very deeply with landowners and community,” Mr Redman said.
Striking deals with financiers was also a critical part of the challenge. “An example of the finance challenge was how long it took to get EnergyConnect financing sorted. So we’re in deep discussion with the federal government, supported by the NSW government, on Rewiring The Nation funding … I’m hopeful that that will unlock the financing challenge so that we can get on and build what the community needs.”
Officials say five major projects, covering 10,000km, need to be built “as urgently as possible”. as fears grow that big storage schemes such as Snowy 2.0 may see new supplies stranded if new developments are not delivered on time.
Some 150 gigawatts of energy supplies, nearly triple the current generation and storage capacity of the Australian market, has been proposed by companies and investors by 2032 — with large-scale solar and wind backed up by battery storage accounting for 88 per cent of the project pipeline.
