AER approval of QNI RIT-T moves vital project closer to completion

Plans by TransGrid and Powerlink to increase the availability of reliable electricity across the national grid have cleared a major regulatory review and can now continue to the next stage of the process.

The Australian Energy Regulator (AER) – which has fast tracked this process - has approved the Regulatory Investment Test – Transmission (RIT-T) for the proposed $230 million upgrade of the Queensland-New South Wales Interconnector.

AER chair Clare Savage said, “The Liddell power station is scheduled to close in 2023, which will reduce the generation capacity in NSW. The proposed interconnector upgrade will allow more electricity to be exported from Queensland to New South Wales avoiding the need for costly new generation.

“The RIT-T is a cost benefit assessment of the proposed interconnector. We tested the reasonableness of TransGrid and Powerlink’s inputs and assumptions across a range of scenarios and found that the project is robust and will deliver a net economic benefit to Australian energy consumers.

“The investment is expected to deliver $170 million in net benefits to consumers and producers of electricity and to support the ongoing energy market transition. The cumulative benefits are expected to exceed the investment cost within seven years.

“We’re saying that the assessment by TransGrid and Powerlink stacks up and that consumers will get value for money from this investment.

“The proposed interconnector will help to address potential system security problems and alleviate upward pressure on wholesale electricity prices,” Ms Savage said.

The AER has fast tracked its consideration to support the timely completion of this significant project. TransGrid expects that construction of the project will start immediately in March 2020, with delivery and completion of inter-network testing expected by June 2022.

TransGrid has separately applied to the AER to amend its existing revenue determination to recover the efficient costs of delivering the project. The AER will make a separate determination on this element in April 2020.

The project is expected to add an extra 60 cents to the transmission component of annual customer bills in New South Wales.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future. 

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland.
  • We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.
Issued date: 
30 March 2020
AER reference: 
NR 09/20
AER Media 0466 409 921