Construction starts on Australia’s most expensive transmission project to connect Snowy

Construction has officially started on the new transmission lines and other infrastructure on the most expensive transmission project to date – the $4.9 billion HumeLink – despite not yet securing all its landowner agreements.

The 365 km HumeLink will include double-circuit 500 kV lines that run from Wagga Wagga to Bannaby south of Sydney, primarily helping connect the over-budget and delayed Snowy 2.0 pumped hydro scheme, and also unlocking wind and solar capacity in the south-west of the state.

Like other major transmission and civil construction projects, HumeLink has experienced a blow out in costs.

It was originally pitched at $1.3 billion by Transgrid, before offical estimates put it at $3.27 billion in 2021, and then $4.88 billion in 2024, when its carrying capacity was also reduced from 2.6 gigawatts to 2.2 gigawatts.

The start of construction comes just a day after Snowy Hydro announced yet another blow out in the costs of its project – over and above the “re-set” that put the costs at $12 billion, up from the original $2 billion.

Critics say that the overall cost of the project has blown out to $20 billion, including transmission, but now expect another major increase. Snowy has indicated the latest cost blowout is so great that it will take 9 months to fully quantify.

HumeLink was initially called SnowyLink North, but its supporters have insisted it is more than that, and is a key part of the AEMO Integrated System Plan that includes the new link to Victoria, VNI West, and the new link to South Australia, Project EnergyConnect.

South Australia energy minister Tom Koutsantonis, not a fan of interstate transmission lines, last week dismissed Project EnergyConnect as an “extension cord to nowhere”. It runs from Robertstown in South Australia to Wagga Wagga in NSW. Humelink will link it into the major load centres in Sydney and surrounding areas.

Transmission projects across the country – like all civil construction projects – are being hit by cost increases caused by rising global demand, supply chain disruption and increased prices for raw materials. The cost of Project EnergyConnect also jumped from $2.23 billion to $4.1 billion.

AEMO has admitted that future transmission plans may have to be rethought, given the average 50 per cent increase in costs. Many urge other solutions such as “virtual transmission” (batteries) and regional micro-grids.

Transgrid, however, insists that even with the higher costs HumeLink will deliver $1 billion in net benefits by reinforcing the grid and enabling the integration of more renewables and storage like Snowy 2.0.

“This is a pivotal moment for the country’s energy transition as Transgrid and our delivery partners get on with the job of delivering this once-in-a-generation project that will help make Australia’s clean energy transition a reality,” Transgrid CEO Brett Redman said in a statement.

“HumeLink is a major step forward in delivering the sustainable, affordable and reliable energy all Australians deserve. I want to thank the Australian Government and the Clean Energy Finance Corporation for supporting this critical project under the Rewiring the Nation program.

“Nation-building projects such as HumeLink are crucial to helping the Australian Government achieve its new 2035 climate change target of a 62 to 70 per cent reduction in emissions, compared with 2005 levels.”

Transgrid has had to overcome local opposition, and implemented several route changes, to progress the project. It now says it has reached negotiated land access and easement agreements, either in place or “agreed in principle,” with 98.9 percent of private landholders for the HumeLink project.

It has flagged compulsory acquisitions if necessary.

It quoted one host landowner, grazier Ken Ikin, who runs the Cloverlee Poll Hereford Stud near the Gullen Range wind farm north of Canberra, and who will have the HumeLink project cross his property.

Ikin says the new transmission line – which will sit side by side with another line on his property – will not interfere with his operations.

“It’s a step forward for the future for our grandchildren and children,” Ikin was quoted as saying.

“The existing line was here the day we came to look at the property. It’s been here for a long time. To put another one alongside and to get paid for it is really, you know, there’s a lot of other things to worry about than that.”

The project will create around 1,600 construction jobs, and deliver $6.3 billion of direct and indirect investment in the regional economy, and will involve the erection of  835 new transmission towers, with 52,610 tonnes of steel, 9,384km of conductor cabling, and 47,400 cubic metres of concrete for substation works and tower footings.

The construction work is being undertaken in two sectors, with Acciona and GenusPlus Group working on HumeLink East, and and UGL and CPB Contractors on HumeLink West.

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