TransGrid’s Board today announced it will build the critical electricity transmission project, EnergyConnect, which will save NSW customers $180 million a year and create 1500 new construction jobs in regional NSW.
TransGrid CEO Paul Italiano confirmed the company will invest $1.834 billion to deliver the major, NSW section of EnergyConnect from Wagga Wagga in the State’s south to the South Australian border.
Mr Italiano said, “EnergyConnect is a transformational energy project which will provide net benefits of up to $11.9 billion and save NSW customers $180 million a year, or $64 annually on an average household bill.
“EnergyConnect will be Australia’s biggest electricity interconnector built to date in the National Electricity Market and it will help to accelerate Australia’s energy transition by connecting customers with more renewable generation.
“EnergyConnect will also help to abate an estimated one million tonnes of carbon emissions each year contributing significantly to meeting Australia’s climate change targets.
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“Regional NSW will benefit from the creation of 1,500 construction jobs and an injection of more than $250 million in direct project expenditure.
“The project will also contribute a further $4 billion in economic activity for NSW.”
Mr Italiano thanked the South Australian Government for its unwavering support for the project, the Federal Government for the support it has provided via an underwriting agreement with South Australia and through the Clean Energy Finance Corporation (CEFC) and project delivery partner, ElectraNet, for the essential role it has played to advance the project through the regulatory process.
The TransGrid Board’s investment decision came after it was able to partially resolve financeability issues for EnergyConnect, which challenge delivery of major regulated transmission projects in the NEM.
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This has been achieved via an agreement between TransGrid and the CEFC on the issue of an innovative $295 million hybrid debt instrument.
Mr Italiano said, “The agreement with the CEFC has been essential to the Board’s final investment decision today and we are thankful to the Corporation for working with us to progress this important project.”
CEFC CEO Ian Learmonth said, “It is significant that the largest single investment the CEFC has made since we began investing will help deliver more renewable energy to Australian consumers by adding such a substantial piece of infrastructure to our electricity grid. We are proud that CEFC finance is supporting this important investment in the grid.”
Work on EnergyConnect is expected to commence by the end of 2021.
The Clean Energy Council said it was an exciting announcement, with CEO Kane Thornton saying it will unlock clean energy projects.
“This is a really exciting and necessary project that will help build a 21st-century electricity network. It also supports significant investment and jobs in renewable energy projects that are at the heart of Australia’s energy transition,” he said.
Energy Networks Australia says customers are the winners in the announcement.
“This commitment from the CEFC of a $295 million hybrid instrument has enabled TransGrid to manage financeability issues that threatened its capacity to proceed,” ENA CEO Andrew Dillon said.
“The CEFC support is very welcome, but if the regulatory regime was delivering reasonable returns for major projects like this, it wouldn’t have been necessary.’’
Mr Dillon said the benefits for customers and the electricity system from EnergyConnect were significant.
“This project is essential to ensure the security and reliability of the grid so it can support increasing renewable energy connections across South Australia and NSW,” he said.
“By enabling new renewable electricity generation, EnergyConnect will reduce wholesale electricity prices, with the net benefit for the average customer being an annual bill saving of about $64 in NSW and $100 in South Australia.”
