The Australian Energy Market Operator (AEMO) has announced the award of the contract to deliver the Western Victorian Regulatory Investment Test for Transmission (RIT-T).
Following a multi-stage, competitive tender process, AEMO awarded the contract to Mondo, the commercial division of the AusNet Services Group (AusNet Services).
Mondo will plan, design, construct, own, operate and maintain the contestable transmission augmentations contemplated by the Project Assessment Conclusion Report (PACR) for the Western Victorian RIT-T.
The Western Victorian RIT-T PACR was published in July 2019, outlining strategic investment to unlock future power system capabilities in the state by reducing the most urgent network congestion in the region and supporting additional generation connections in Western Victoria.
This will expand the diversity and availability of energy supply and help to protect consumers from paying more than necessary for their electricity in the long term.
The preferred investment set out in the PACR will be progressed through the Western Victorian Transmission Project (Project) and includes a combination of minor upgrades to existing infrastructure and major transmission works – including a new North Ballarat terminal station and long-distance high voltage transmission lines between Bulgana and Sydenham terminal stations.
The project will be staged over several years, with the final component expected to be in operation by 2025.
Ballarat Mayor, Ben Taylor, said the announcement enables the new energy industry in the region to expand and flourish.
“As a city proud of its large-scale food and industrial manufacturing for the employment and economic benefits it brings, we are particularly exposed to interruptions in electricity supply which can result in major costs and risks to business,” Mr Taylor said.
“The fact that sizeable amounts of wind and solar energy is currently restricted every year due to the limitations of the present transmission system in Western Victoria is also of huge concern – that’s clean renewable energy that is currently not being used by households and businesses.
“We can’t ignore the benefits that strengthening the Western Victorian transmission network will bring the region’s businesses and residents. An improved capacity of the network will attract more new businesses to the region, while also helping keep energy prices affordable to households and businesses.”
AusNet Services will also construct, own, operate and maintain the majority of the non-contestable assets required for the Project, comprising primarily of interface and associated network changes to support the new contestable assets.
Australian Energy Operations (AEO) will also undertake important upgrade works to support the Project at its Elaine and Ararat terminal stations.
This Project is consistent with the recommendations of AEMO’s Integrated System Plan (ISP) and is estimated to deliver a total return of $670 million (in 2019 dollars) in market benefits (that is all benefits to all those who produce, consume and transport electricity in the market), achieved through:
- The capital and dispatch cost of generation being significantly lower than they otherwise would have been
- Facilitation of future transmission network expansion
- Improvements to the Victoria to New South Wales interconnector transfer limit
AEMO Managing Director and Chief Executive Officer, Audrey Zibelman, said, “This Project will deliver urgent transmission capacity to the western and north-western Renewable Energy Zones identified in the ISP, unlock renewable energy resources and maximise the productivity of existing assets, working to reduce the cost of electricity in the long term.
“The delivery of this critical energy infrastructure project against the economic envelope set by the RIT-T is a chief priority for AEMO and we conducted a robust competitive tender process to achieve the best possible outcome to deliver the contestable components of this Project.
“On behalf of AEMO, I would like to congratulate AusNet Services on its successful tender submission. Through this tender process, AusNet Services has demonstrated that it has the resources and capability to deliver this significant Project. We would also like to acknowledge and thank all those who contributed to this undertaking and submitted proposals to this tender process.”
This transmission investment will support the development of major hubs for wind and solar energy in the region by strengthening transmission corridors to more efficiently transport large quantities of renewable energy to consumers.
The project is also aimed to provide additional benefits for communities in Western Victoria such as employment, economic growth, training and other regional development opportunities that were not quantified in AEMO’s RIT-T assessment.
The exact design, route and location of the new infrastructure required to deliver this Project is yet to be determined.
AEMO has acknowledged the important environmental, amenity, cultural and community matters raised by stakeholders through the RIT-T consultation process.
These matters will be considered and addressed by AusNet Services in delivering the Project. AusNet Services will undertake extensive investigations, and further stakeholder and community engagement, before any routes or locations are approved, and will be responsible for securing the necessary planning and environmental approvals to deliver the infrastructure.
AEMO will complete a handover to AusNet Services, and AusNet Services will assume full responsibility for delivering the Project, including liaising with stakeholders and providing updates and information on the Project, with more details available on its website WestVicTNP.com.au shortly.