Four options for a new interconnector between South Australia and the eastern states are being considered at a cost of up to $2.5 billion, according to a report released by South Australia’s electricity transmission network owner ElectraNet.
The report warns customers could wind up paying $500 million a year more for electricity than those in other states, noting several generators have permanently or partially withdrawn from the state’s power market because of substantial investment in new wind and rooftop solar generation.
ElectraNet says approximately 45 per cent of the state’s power comes from renewables, a major factor in the close of the coal-fired Northern Power ¬Station that has made South Australia more reliant on gas markets for its electricity supply.
“Gas in the interconnected eastern seaboard markets has also experienced a rapid increase in demand and subsequently price,” the report states.
It also says South Australia’s electricity base futures prices stood at approximately $100 per megawatt hour for the next three years, while prices in NSW and Victoria ranged from $55 to $65/MWh.
ElectraNet’s interconnector options include two linking South Australia to NSW, one connecting to Victoria and another linking South Australia to Queensland.
The options have initial cost estimates of ¬between $500 million and $2.5 billion, and are not expected to be operational before 2021.
A new interconnector project would go ahead only if approved by the Australian Energy Regulator and only if sufficient benefits could be demonstrated.