The South Australia state government says it will underwrite another $12.25 million in funding for early works on the proposed new inter-connector to NSW, which it says will help unlock more than $4 billion in renewable and associated investment.
The new underwriting of the early works to be conducted by state transmission company Electranet takes the state government’s pre-construction spending to around $88 million, hoping to maintain the momentum of the project as it works its way through the multi-layered regulatory approval processes.
The new link – dubbed Project Energy Connect – is considered essential by both the South Australia government and the Australian Energy Market Operator, because it will unlock new investment in South Australia, as well as relieve congestion and constraints in Victoria and NSW.
However, the construction cost of the project has jumped by more than 50 per cent to nearly $2.5 billion, although the state government insists the economic benefits – in the form of bill savings for customers ($100 a year) and in new projects – will more than offset the cost.
“There is currently more than $2 billion-worth of large-scale energy infrastructure either under construction or committed in South Australia,” state energy and mining minister Dan van Holst Pellekaan said in a statement.
This includes the $660 million home solar and battery programs, and the contract for the state’s largest solar farm at Cultana (260MW) and another big battery at Port Augusta (the Playford big battery) to power the South Australian government, as well as Iberdolar’s Port Augusta wind and solar park. It says more projects will follow if the new link is approved, and it wants to ensure that the new link is ready to go in early 2024.
“We want to grow this boom to over $4 billion with the new SA-NSW interconnector,” van Holst Pellekaan said.
“This project will unlock billions of dollars of new investment in major renewable energy projects, creating jobs in regional areas. The Marshall Government is determined to achieve net-100% renewable energy and reduce emissions state wide by 50% on 2005 levels, both by 2030.
“That’s why the Clean Energy Council supports the project, and the Climate Council is calling on all political parties in South Australia to support it. It’s time (state) Labor admit its errors and gets on board.”
The South Australia government says the early works package allows ElectraNet to continue critical tasks – such as its environmental impact statement, procurement activities and land and easement acquisition – are completed before a final decision is made.
ElectraNet’s Contingent Project Application awaits approval by the regulator, possibly by the end of the year, but the project also depends on a proposed rule change put forward by Transgrid (responsible for the bigger NSW part of the interconnector) to help get around some of the perceived financing difficulties. That decision is not expected until the first quarter next year.
