Investment safeguard ensures delivery of nation-critical EnergyConnect project

The essential interconnector will provide access to cheaper and cleaner renewable energy for millions of households and businesses in NSW, South Australia and Victoria.

Independent modelling shows EnergyConnect will deliver total benefits of $4.2 billion, with net benefits of $964 million after costs – meaning the National Electricity Market and consumers are better off overall. 

An application has been lodged with the Australian Energy Regulator to recover a portion of the additional investment made by Transgrid to safeguard delivery of the project and unlock wholesale energy savings and improved reliability and security of supply for consumers.

“Our shareholders have invested significant additional equity to keep this nation-critical project on track to strengthen the National Electricity Market and deliver a more reliable and affordable energy supply to millions of consumers,” Transgrid CEO Brett Redman said.

“Expert independent analysis shows consumers in the three states will be better off because the small additional transmission charge will be more than offset by the significant savings in wholesale energy costs enabled by the project.

“By bridging the gaps between three state grids, EnergyConnect provides a unified energy backbone to carry stable, low-cost renewable power exactly where and when it’s needed most.

“This vital link not only secures our energy future as coal power fades but also delivers direct relief to household budgets, putting hundreds of dollars back into the pockets of families. 

“There’s no doubt that EnergyConnect remains the best option to meet the long-term energy needs of consumers while helping to achieve Australia’s renewable energy and climate change targets.”

Independent analysis demonstrates the new transmission line will provide consumers with access to much cheaper wholesale generation, which is the largest part of consumer bills.

Generation costs are estimated to decrease by an average of $25 to $30 per year for a typical household in NSW due to the delivery of EnergyConnect.

This means that accounting for the additional transmission cost, household bills in NSW alone are expected to go down by $5 to $15 annually. 

“The regulatory process is designed to protect consumers and only costs that are proven to be prudent and efficient can be recovered,” Mr Redman said.

“The regulatory framework ensures that consumers only pay for costs that are both fair and justified.

“EnergyConnect is part of our plan to give industry and consumers peace of mind as coal generation winds down in NSW, stabilising the grid at a time when reliability and affordability are national priorities.” 

The additional cost of constructing EnergyConnect was driven by unforeseen external factors including flooding in 2022-23, COVID-19, increased cost of labour and materials due to unprecedented global demand, inflationary pressure and the collapse of one of the project’s original joint venture delivery partners.

Construction of EnergyConnect is now 97.5% complete, with the project to meet its revised delivery schedule for completion later this year.

Transgrid’s EnergyConnect application will be published on the Australian Energy Regulator’s website.

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