Interconnector upgrade to benefit NEM

A proposal to upgrade the South Australian and Victorian Heywood electricity network interconnector will optimise the transfer of power between the two states.

The proposal to install a third transformer at Heywood in Victoria, series compensation on 275 kV transmission lines in South Australia, and 132 kV network reconfiguration works in South Australia is expected to increase interconnector capability by about 40 per cent in both directions.

This will enable increased wind energy exports from South Australia and also increase imports of lower cost generation into South Australia, particularly at times of peak demand.

If approved, the project will deliver net market benefits of more than $190 million over the life of the project with positive net benefits commencing from the first year of operation.

The proposed option has been outlined in the Regulatory Investment Test for Transmission (RIT-T) process undertaken by the Australian Energy Market Operator (AEMO) and South Australia’s Transmission Network Service Provider ElectraNet to investigate increasing the capacity of the South Australia to Victoria interconnector.

AEMO acting chief executive officer David Swift said the project is timely considering the addition of significant amounts of wind generation in South Australia over the past few years, and that the Heywood Interconnector is now being used to export power from South Australia, as well as to import power.

“A robust cost-benefit analysis has been undertaken which demonstrates benefits to the market of increasing interconnector capability across a range of future scenarios and cost input assumptions,” he said.

ElectraNet CEO Ian Stirling said, “The RIT-T assessment reinforced ElectraNet and AEMO’s commitment to ensuring efficient inter-regional electricity infrastructure investment and optimising network transfer capacity for the NEM,”

“The proposed upgrade has the potential to deliver significant reducations in generation dispatch costs over the longer term.”