Broken Hill Supply

Broken Hill is one step closer to becoming one of the world’s largest grid-connected all renewable mini-grids.

We are undertaking a Regulatory Investment Test for Transmission (RIT-T) process to investigate options including a new grid-scale storage facility to leverage the significant wind and solar generation of the region and ensure a more reliable supply in Broken Hill.

Following publication of the Project Assessment Draft Report (PADR) in August 2020, the Australian Energy Regulator (AER) published an update to its RIT-T Application Guidelines which outlined a revised approach to the estimation of non-network option costs. 

The AER’s Guidelines clarified that RIT-T analysis should reflect total costs and market-wide benefits of credible non-network options. This is a change from the previous approach, in which costs of non-network options were estimated based on costs that could be expected in a tender process.

We subsequently put development of the Broken Hill Project Assessment Conclusions Report (PACR) on hold to seek confirmation from the AER on whether to continue to use the previous approach or apply the change outlined in the updated Guidelines.

The AER has now advised that we should publish a revised PADR that takes into account this change, and also takes into account the benefits and costs on both the buy-side and the sell-side of the propose transfer of ownership of the existing gas turbines at Broken Hill.

We expect to publish the revised PADR in Q3 2021.

About Broken Hill

Broken Hill is located in the far west of New South Wales and is part of TransGrid's south western transmission network. It is currently supplied by a single 220 kV transmission line, 'Line X2', from Buronga which spans approximately 260 km.

When Line X2 is out of service due to a planned or unplanned outage, electricity supply to Broken Hill is supported by two gas turbines owned by Essential Energy to avoid involuntary load shedding (these turbines each have a nameplate rating of 25 MW). TransGrid relies on these gas turbines to meet the NSW Electricity Transmission Reliability and Performance Standards 2017 (the 'reliability standards') set by the NSW Energy Minister and regulated by the NSW Independent Pricing and Regulatory Tribunal (IPART). In accordance with these standards, Essential Energy's gas turbines allow TransGrid to operate its network so as not to expect more than 10 minutes of unserved energy (EUE) per year at average demand.

Essential Energy has notified TransGrid of its decision to divest the gas turbines located at Broken Hill. If no action is taken by TransGrid, this will result in the required reliability of supply to Broken Hill not being maintained, and involuntary load shedding when Line X2 is on planned or unplanned outage.

We consider this a 'reliability corrective action' under the RIT-T as the identified need is to ensure that the externally-imposed reliability standards for Broken Hill continue to be met. 

  • The Consultation Process

    TransGrid’s revenue determination for the 2018-2023 regulatory control period includes a contingent project for the reliability of supply to Broken Hill. This contingent project is to provide additional capacity to supply Broken Hill in an event that the total 220 kV and 22 kV load at Broken Hill exceeds the capacity of the back-up gas turbines owned by Essential Energy and EUE exceeds the allowance.

    In order to efficiently avoid involuntary load shedding and meet the reliability standards we adopted a two-step approach.

    • Step 1 – Establish a short-term non-network support solution, via an Expression of Interest (EOI) process. This short-term non-network support solution will be required to be available:

      • immediately; and

      • until the long-term solution, which will be identified under this RIT-T process, is operational. 
    • Step 2 – Establish a long-term solution via the RIT-T process. It may take up to three years for this long-term solution to be operational. 

    A timeline for the RIT-T process is below.

    ​November 2019
    ​Project Specification Consultation Report (PSCR) published for consultation
    ​31 January 2020
    ​Deadline for written submissions to Project Specification Consultation Report (PSCR) and accompanying EOI.
    ​11 August 2020
    ​Project Assessment Draft Report (PADR) published for consultation
    ​22 September 2020
    ​Deadline for written submissions to PADR
    Q3 2021
    ​Revised Project Assessment Draft Report (PADR) published for consultation
    To be advised

    ​Project Assessment Conclusions Report (PACR). The PACR will address PADR submissions and determine the preferred option. 

    To be advised
    ​Conclusion of RIT-T process

  • The RIT-T Process

    In November 2019, TransGrid published the Project Specification Consultation Report (PSCR). The PSCR detailed the need to maintain reliable supply to Broken Hill and describes credible options to meet the need, including technical characteristics of a non-network option.

    Maintaining a reliable supply to Broken Hill Project Specification Consultation Report (PSCR)

    In response to the PSCR, we received submissions from five parties. Four of these parties requested confidentiality. The fifth submission was from the Public Interest Advocacy Centre and is available below:

    Public Interest Advocacy Centre 

    Comments and points raised in all submissions were considered when preparing the Project Assessment Draft Report (PADR). The PADR is a full quantitative analysis of the proposed options and expected market benefit across a range of scenarios and sensitivities.

    Maintaining reliable supply to Broken Hill Project Assessment Draft Report (PADR) 

    Due to the confidentiality requested by proponents of solutions, we are only able to present the overall net market benefits of each credible option in the PADR and publish this supporting document:

    Market Modelling Report

    In response to the PADR, we received submissions from eight parties. Submissions approved for publication are below:

    Prior to, as well as after, receiving submissions, TransGrid held a number of bilateral meetings with submitters to enable greater understanding of the RIT-T assessment, the reliability requirements at Broken Hill and how the proposed solutions are expected to be able to assist with meeting the identified need. These discussions played a pivotal role in being able to define and include the credible options assessed in this PADR.

    TransGrid engaged further with parties based on the outcome of the PADR to confirm the technical feasibility of the options, which involved the provision of further information and modelling from these parties. A full assessment of technical feasibility will be undertaken ahead of the PACR where parties confirm they are proponents and provide the required information.

    Having sought advice from the AER, we will issue a revised PADR incorporating changes outlined in the AER’s updated RIT-T Application Guidelines. The revised PADR is expected to be published in Q3 2021. A six-week consultation period will follow, during which we welcome submissions on the revised PADR.

  • Submissions and Next Steps

    Thank you to those who made submissions on the PSCR and the PADR. The next formal stage of this RIT-T will be publication of a revised PADR in Q3 2021.