By RE-Alliance
The release of Transgrid’s Concept Design and Cost Estimate for the Humelink Project – Underground study, has discussed costs for undergrounding the HumeLink, as local community groups have highlighted their concerns with the methodology of the report.
HumeLink is a new 500kV transmission line which will connect Wagga Wagga, Bannaby and Maragle. It will connect the pumped hydro project Snowy 2.0 to Sydney, Newcastle and Wollongong, where the power is most needed.
It is one of the state’s largest energy infrastructure projects, with about 360km of proposed new transmission lines, and new or upgraded infrastructure at three locations.
The project is designed to connect new wind and solar farms to the network, as well as the Snowy 2.0 pumped hydro project. It expects to create more than 1000 new construction jobs and generate benefits for local communities along the route.
In late 2021, following a request from the local community, Transgrid agreed to investigate options exploring the feasibility of building the HumeLink project via underground cable instead of overhead transmission lines. The community was able to appoint a qualified firm as an independent technical advisor to the report.
Communities see undergrounding as a preferable option as it reduces the visual impacts of the lines.
The report investigated a number of HVAC (High Voltage Alternating Current) or HVDC (High Voltage Direct Current) options, both above ground and underground.
The report estimated a cost of $17.1 billion to put HVAC lines underground. Utilising a HVDC option, whilst significantly reducing the undergrounding costs, is still significantly higher than for above-ground transmission lines and would bring a delay of two-three years in the delivery of the project.
The report has found that the cost of undergrounding the HumeLink transmission lines is estimated to be $11.5 billion (for Option 2A-1, HVDC lines), which is at least three times more than the entire project’s current cost of $3.3 billion. This option is expected to take seven years to build, compared to four-five years for the overhead option.
Increased costs are driven by a range of factors, most obviously the need to dig the trenches. Other costs include labour, materials, plant and equipment, engineering and project management costs.
In all options investigated, there are significant biodiversity offset and land costs. For a 70m easement, biodiversity offset costs are estimated at $2,090,000/km and land costs (payments to landholders) are estimated at $475,000/km.
The report also notes that internationally there is high demand for equipment and few suppliers, which is leading to reduced competition on projects and less competitive pricing.
The Humelink Community Consultation Groups Steering Committee, formed by Transgrid and made up of local community members, has responded to the report and said it was unbalanced as it “favours an approach of focussing on the negative aspects of selecting underground high voltage cables over AC overhead lines” and ultimately did not endorse the report.
The Community Groups listed eleven concerns in their response, including concerns that costs of DC underground lines were overstated for a number of technical reasons. The Community Groups noted there are a number of underground options or hybrid underground/overhead options of suitable reliability rating that are between 2.9 and 3.5 times the estimated cost of the current AC overhead option.
The group concluded: “Hopefully the outcomes of this report will debunk the often-repeated myth that undergrounding is ten times the cost.”
The Community Groups acknowledged a three-time cost increase, but said they felt additional options were not adequately considered.
The Community Groups are calling for a full and comprehensive expert review of the HumeLink undergrounding study to address what they see as problem areas in the report. However, the finding of such substantial additional costs means that an undergrounding option will not pass the current regulatory framework, the Regulatory Test for Transmission (RIT-T). Overseen by the Australian Energy Regulator, the RIT-T only approves what are deemed to be efficient costs, which in this case is the above-ground option, which has recently been approved for early works.
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