Critical NSW grid stabilisation plans advance to final stages

The projects include securing system strength services from third-party-owned grid-forming batteries, the delivery of ten synchronous condensers across five sites and a deal to utilise hydro units in synchronous condenser mode when needed to provide additional system strength.

The NSW Government last year directed the grid operator to accelerate its first order of synchronous condensers as a Priority Network Infrastructure Project (PNIP), shaving two years off the delivery schedule for these highly sought-after machines.

Following a competitive process, GE Vernova was awarded the contract to supply the equipment in October, with tenders currently being finalised for site enabling works to accommodate the machines at existing Transgrid substations in Newcastle, Armidale, Darlington Point, Wellington and Kemps Creek.

Transgrid Executive General Manager of Network, Jason Krstanoski, said the company is now seeking final approval to proceed with the first phase of system strength works, identified as critical in its System Strength Plan.

“Transgrid is getting on with the job of delivering critical and cost-effective solutions to support the continued transition of the NSW power system towards the Government’s target of 100% instantaneous renewables and deliver cheaper and cleaner energy to millions of consumers,” Mr Krstanoski said.

“The Australian Energy Regulator (AER) reviewed our competitive assessment process to select the parties to supply and install these essential synchronous condensers and we have now applied for final approval of the project, which will support the progression of civil and building works at priority sites before the end of 2026.”

The GE Vernova synchronous condensers are scheduled to arrive in Australia from mid‑2027, with installation and commissioning occurring progressively so that all units are planned for energisation by February 2029, in line with the PNIP.

The total cost of the project is $1.19 billion, reflecting continued escalation of supply constraints for this equipment as power systems worldwide transition away from coal to renewable energy.

“Our System Strength Plan is designed to keep the ‘heartbeat’ of the grid strong at the lowest possible cost for consumers,” Mr Krstanoski said.

“Our mix of cost-effective solutions will help avoid the need to increasingly rely on costly stop-gap measures to provide system strength.”

In recent weeks, Transgrid has also progressed negotiations with the owners of nine grid-forming battery projects assessed as feasible to provide up to 2GW of system strength services to the NSW transmission network.

“Shortlisted parties are due to respond to our request for proposals in June, and we will look to enter into contracts with successful proponents in the second half of this year,” he said.

“By 2033, we are ultimately targeting 5GW of stabilising services from third-party owned batteries to complement the proven grid-strengthening role played by synchronous condensers.”

Transgrid has also entered into a system strength contract with Snowy Hydro, which was assessed positively by the AER in December.

“Our plan identified the use of hydro units, especially those capable of running in synchronous condenser mode, as a key non-network solution to support the NSW transition over coming years,” Mr Krstanoski said.

“The contract provides for Snowy Hydro to operate the Tumut 3 hydro units in synchronous condenser mode when required, as called upon by AEMO to fill any gaps in system strength.”  

Media enquiries: James Atkinson 0475 965 030 / james.atkinson@transgrid.com.au