QNI Upgrade Report

Wednesday, 31 October 2007

Powerlink and TransGrid to release report on upgrade of
electricity interconnector

In late 2007, electricity transmission companies Powerlink Queensland and TransGrid will release a report on their detailed studies into the economic viability of an upgrade of the Queensland/NewSouth Wales Interconnector (QNI) to National Electricity Market participants.

Powerlink's Chief Executive, Gordon Jardine, and TransGrid's Chief Executive, Kevin Murray, said the Draft Report for Market Consultation would include the results of detailed market simulation studies undertaken to determine if, and when, an upgrade to this electricity link between the two States would be economically feasible under the Australian Energy Regulator's (AER) Regulatory
costs/benefits Test.

Mr Jardine and Mr Murray said the studies were currently being finalised. However, the findings of the studies would be comparable with the high level conclusions in NEMMCO's 2007 Annual National Transmission Statement released today, which indicates that market benefits of upgrading the QNI may justify an upgrade, but that the net benefits under the AER Regulatory Test may not arise until the latter part of the ten year planning horizon.

Earlier studies carried out by Powerlink and TransGrid had indicated the benefits of an upgrade of the QNI might have been economically feasible as early as 2009/10. However, recent commitments by various generators of new generating capacity in New South Wales in 2008/09, and in Queensland in 2009/10, result in a further deferral of the potential benefits of an interconnector upgrade.

The transmission CEOs said that the QNI continues to deliver substantial benefits to the National Electricity Market, by enabling generation to be shared between Queensland and New South Wales, and reducing the overall costs of ancillary services.

They re-affirmed their commitment and willingness to invest in any interconnector upgrades that could deliver positive net benefits under the AER's Regulatory Test.

Media Contact: David Fayyad, Corporate Relations Manager
Email: media.contact@transgrid.com.au