Victorian electricity distribution company Powercor has been granted a transmission licence, an achievement it says will create more competition and faster connections for new wind and solar farms in the state.
Powercor, which runs the poles and wires network throughout western Victoria and the western suburbs of Melbourne, says the Essential Services Commission approved its licence application this month, after a period of stakeholder and community consultation.
The licence allows the distribution network service provider (DNSP) to design and build new terminal station infrastructure within its current footprint. And while Powercor maintains this won’t stretch to large transmission line corridors, it will mean building 220kV lines to enable easier connection – including for large-scale solar, wind and storage projects.
“Our entry into the transmission market means more competition, lower prices and better service for customers,” Powercor chief Tim Rourke said on Wednesday.
“Providing quick and easy power connections for major businesses and clean energy projects is critical as Victoria competes nationally and globally to attract investment and jobs.
“We’ve already received strong interest from major customers, showing that another provider in the market was needed.”
The licence also means Powercor will own, operate and maintain any necessary upgrades to the transmission system.
Rourke says Powercor’s distribution network already supports more than 2,625MW of large-scale renewables and is home to four of Victoria’s six Renewable Energy Zones.
“We have a strong understanding of what is involved in delivering transmission projects, from the technical requirements through to the relevant legal and regulatory framework as well as the stakeholder engagement needs,” he said on Wednesday
“We are ready now to speak with customers about their transmission needs.”
Lack of competition in the transmission network sector has been a subject of debate in Australia, particularly in light of the increasingly urgent task of upgrading the grid to bring it up to speed with the transition to renewables.
Nexa Advisory last year published a report arguing that a lack of competition and contestability for transmission projects in Australia’s National Electricity Market (NEM) is delaying the progress of crucial grid upgrades and driving up costs at a time that households and businesses can least afford it.
The question will be whether extending the commercial reach of an existing incumbent distribution network company is the right way to go about creating competition.
