The Australian Energy Regulator has signed off on the $45.7 million first stage of a South Australia transmission upgrade that will link some of the state’s best renewable energy resources with growing demand in Adelaide, including from future green industrial loads.
The spend proposed by ElectraNet is for stage 1a early works on for Northern Transmission Project (NTx), a project that will construct new 275 kV and 132 kV transmission lines linking Robertstown, Davenport and Cultana to strengthen connections between the Mid North, Greater Adelaide and the Upper Spencer Gulf (Whyalla).
In a statement, the regulator said the $45.7 million amount was “prudent and efficient” to kick off a project the Australian Energy Market Operator (AEMO) hopes can be completed by July 2029, according to its 2024 Integrated System Plan (ISP).
“We have assessed that ElectraNet’s proposed incremental capital expenditure for these early works is prudent and efficient,” the AER said on Friday.
“We also determined that all trigger events for this contingent project application have been met and the project costs exceed the materiality threshold.”
The AER says the project costs will be added to ElectraNet’s total maximum allowed revenue for the 2023–28 period and reflected in customer bills from 2026–27 onwards, with an estimated increase of $0.56 per annum in residential electricity bills in South Australia.
The costs will cover the initiation of community and stakeholder engagement, the commencement of easement acquisition activities and the progression of project planning activities to ensure bill for Stage 2 – which will account for the bulk of the project’s costs – is as low as possible.
Image source: ElectraNet. Click to enlarge.
Approval of the first stage of the project comes just one day after ElectraNet CEO Simon Emms’ appearance at Australian Energy Week in Melbourne, where he underscored the urgent need for approval to build new transmission lines.
“No one expected South Australia’s penetration of renewables to get where it did as quickly as it did,” Emms told the conference on Thursday, as Renew Economy reports here.
“We’re now seeing that AEMO’s forecasts are not keeping up with the customer demand we are seeing in South Australia. The big risk we are seeing is under investment, not over investment.”
Emms says the urgency is being driven by the coincident boom in interest in green industry as well as world-leading “coincident wind and solar” resources in the state’s upper Spencer Gulf region – a point that is also made in ElectraNet’s project application.
“In recent years there has been unprecedented activity leading to the likely growth in industrial load in the Upper Spencer Gulf region. The South Australian Government has identified this as a once in a generation opportunity which it is intent on seizing for the benefit of all South
Australians,” the documents say.
“Through the Prosperity Plan, the South Australian Government intends to leverage the unique combination of renewable resources and rich mineral deposits in the Upper Spencer Gulf and surrounding regions to deliver economic growth to the State.
“ElectraNet wholeheartedly supports this plan in spirit and, through the Mid North Renewable Energy Zone expansion, intends to do what it can to support it in action as well.”
In a statement on Friday, ElectraNet said the decision would allow it to continue with key project development activities, including finding the most “prudent and efficient” way to meet demand while also delivering overall community and customer benefit.
“These early works will inform a detailed cost benefit analysis for the RIT-T that aims to deliver an expanded and more reliable transmission network to meet the demand of our rapidly growing Northern regions in South Australia,” the statement says.
