Clean energy investors want state and federal governments to fully fund a $12.5 billion pipeline of urgent electricity transmission projects, according to a report in The Australian.
More than $12 billion of power transmission projects are required to be built over the next decade to keep pace with the rapid rise of renewables around the country.
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According to the report, industry is growing frustrated that funding barriers and issues with the default regulatory investment test were stifling Australia’s clean energy transition at a critical time for the sector.
“Nexa Advisory has called for federal and state governments to set up a mechanism to fully fund the upfront cost of capital expenditure for the build of new transmission assets. It argues governments could initially fund these projects and then sell to a transmission owner, once the assets are operational and generating benefits in the national electricity market,” the report says.
“Federal and state and territory governments have a critical role in resolving the impasse that we have reached, and in removing the roadblocks in building new transmission. Government fully funding the upfront capital costs, dovetailed with efforts to resolve the approval and social licence roadblocks, is fundamental to ensuring that the required new transmission is built rapidly,” Nexa said.
Nexa also wants an urgent review of the RIT-T to be changed amid concerns the current investment test for transmission was best suited for extra grid enhancements rather than a regulation governing a major rebuild of the system.
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“Any new approach would still need to allow customers the certainty that any new transmission had benefits beyond the costs. Additionally, state and territory governments have a critical role in expediting state-based planning approvals and can ensure new transmission projects can progress rapidly, potentially through the expansion of the remit for existing institutions,” Nexa CEO Stephanie Bashir said.
Read the full article here.
