Transgrid has filed an application with the Australian Energy Regulator (AER) to recover additional costs made by the company towards transmission project EnergyConnect—an interstate interconnector that will provide access to renewable energy projects across New South Wales, Victoria, and South Australia.
Construction of the South Australian component of Project EnergyConnect was completed on time and within budget by Electranet.
Related article: Specialist teams go into overdrive to progress EnergyConnect
Transgrid’s portion of EnergyConnect is ongoing, however, the company says the project is on track to meet its revised delivery schedule later this year.
Cost estimates for the project have reportedly blown out by $1.5 billion—an increase of almost 75%.
Transgrid said the additional cost of constructing EnergyConnect was driven by unforeseen external factors including flooding in 2022-23, COVID-19, increased cost of labour and materials due to unprecedented global demand, inflationary pressure, and the collapse of one of the project’s original joint venture delivery partners.
According to Transgrid, independent modelling shows EnergyConnect will deliver total benefits of $4.2 billion, with net benefits of $964 million after costs.
“Our shareholders have invested significant additional equity to keep this nation-critical project on track to strengthen the National Electricity Market and deliver a more reliable and affordable energy supply to millions of consumers,” Transgrid CEO Brett Redman said.
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“Expert independent analysis shows consumers in the three states will be better off because the small additional transmission charge will be more than offset by the significant savings in wholesale energy costs enabled by the project.
“By bridging the gaps between three state grids, EnergyConnect provides a unified energy backbone to carry stable, low-cost renewable power exactly where and when it’s needed most.”
