TransGrid and ElectraNet – Project EnergyConnect contingent project

Sector: 
Segment: 
Status: 
Commencement date: 
30 September 2020
Effective date: 
1 July 2021
Contact: 
General enquiries - Contingent projects contingentprojects@aer.gov.au
AER reference: 
65362

Overview

On 30 September 2020, TransGrid and ElectraNet submitted final contingent project applications to the AER seeking increases in their allowed revenues to construct the new South Australia to New South Wales interconnector (Project EnergyConnect).

Project EnergyConnect involves the construction of a new 860 km 330 kV interconnector between Robertstown in mid-north South Australia and Wagga Wagga in New South Wales, with an augmentation between Buronga and Red Cliffs in north-western Victoria.

The full cost of the project is forecast to be $2.4 billion:

  • The New South Wales component is forecast to cost $1.9 billion. TransGrid’s application seeks the incremental revenues required to construct the NSW component within its allowed regulated revenues.
  • The South Australia component is forecast to cost $471 million. ElectraNet’s application seeks the incremental revenues required to construct the SA component within its allowed regulated revenues.

These applications relate to the preferred network investment option identified through ElectraNet’s South Australian Energy Transformation Regulatory Investment Test for Transmission (RIT-T).

The next step is the AER’s determination on the prudent and efficient capital and operating costs required to construct the interconnector, and the incremental revenue that TransGrid and ElectraNet may recover within the 2018–23 regulatory control period to fund the project. Funding for additional revenue for a ‘contingent project’ is permitted under clause 6A.8.2 of the National Electricity Rules through an adjustment to maximum allowed revenues under existing revenue determinations. The AER will review the reasonableness of the proposed cost of Project EnergyConnect with the aim of ensuring consumers pay no more than necessary for safe and reliable energy.

We have provided an indicative timetable of the review process to make a decision on these contingent project applications. The AER will make every effort to deliver both a thorough and timely decision.