TransGrid is to fast track spending on a key network upgrade in south-west NSW in a move to boost the capacity to support wind and solar projects – even before it has obtained regulatory approval.
TransGrid said that the $180 million upgrades would support both the EnergyConnect link between South Australia and New South Wales, and the Victoria-New South Wales West (VNI West) interconnector.
It argues that by undertaking the upgrade of the transmission link between Dinawan and Wagga from 330kV to 500kV now, it will avoid the need to duplicate network links in the future, achieving a significant cost saving.
These upgrades will also ultimately support the development of a South West Renewable Energy Zone and the Snowy 2.0 project, and provide a link to Transgrid shareholder Spark Infrastructure’s proposed Dinawan renewable energy hub, a 2.5GW wind, solar and battery storage project.
TransGrid executive manager of delivery, Craig Stallan, said that progressing the transmission upgrade now, at an estimated cost of $180 million, would avoid having to upgrade the section at a later date at an increased cost of $600 million.
“Greater transmission capacity makes our transition to a clean, low cost energy system possible. Today’s announcement will unlock 50 per cent more capacity now and allows for an additional 250 per cent (for a total of 300 per cent) when operating at 500KV,” Stallan said.
The project has received underwriting support from the federal government, which will make up to $181 million available to help lower risks to the project, or if it does not secure regulatory approval for the expenditure.
TransGrid said it would seek regulatory clearance for the upgrade “at a later date.”
NSW energy minister Matt Kean welcomed both the commitment from TransGrid to the upgrades and the financial support from the federal government.
“I want to thank the Commonwealth for getting this project and the South West REZ over the line and helping deliver reliable, affordable and clean electricity for the State,” Kean said.
“The South-West Renewable Energy Zone will drive jobs and investment into regional NSW, and help to provide homes and businesses across the state with some of the cheapest, cleanest electricity anywhere in the world.”
According to modelling produced by the Australian Energy Market Operator, a South West Renewable Energy Zone could support as much as 4,000MW of new solar generation capacity and an additional 4,300MW of new wind generation.
Investments of this scale would be contingent on sufficient transmission network upgrades to avoid further network congestion and support power being transferred to other parts of the grid.
TransGrid has committed to investing $1.8 billion in its portion of the larger EnergyConnect project, which will boost energy flows between New South Wales and South Australia and is partnering with ElectraNet, which will invest more than $450 million on the South Australian side of the project.
EnergyConnect will see a new 900km link built between the two states, boosting electricity transfers by 800MW. The project is expected to deliver significant flow-on benefits for energy consumers, including an estimated $180 million a year in savings for New South Wales households and businesses.
The EnergyConnect project is also being underwritten by federal government support, including a $295 million hybrid debt instrument provided by the Clean Energy Finance Corporation.
The project secured regulatory approval in May, with investment clearance being issued by both TransGrid and ElectraNet shortly thereafter.