The proposed SA-NSW interconnector is a step closer to the final approval stage, with ElectraNet submitting its commitment to proceed with the project to the Australian Energy Regulator (AER).
ElectraNet Chief Executive, Steve Masters, said ElectraNet’s Board has resolved to commit to proceed with the South Australian section of the project, subject to the AER awarding incremental regulated revenue commensurate with the capital and operating costs of the project.
ElectraNet is continuing to work proactively with the AER to progress the project through its last regulatory approval, with a final determination anticipated in the coming weeks. Following the AER’s determination, ElectraNet would then enter its Final Investment Decision phase for the project.
When it released its preliminary position in December 2020 on the contingent project application for Project EnergyConnect, the AER indicated that the board resolution from ElectraNet as part of its application should fully reflect the contingent project trigger event.
“The board’s resolution fully satisfies the final contingent project trigger event requested by the AER to enable it to make a formal determination under the National Electricity Rules,” Mr Masters said.
“This is an important project for the national electricity grid and is a priority project for ElectraNet, the Australian Energy Market Operator (AEMO) and many other stakeholders.
“We look forward to concluding the regulatory approval process to support the timely delivery of the project in the interests of electricity customers across the National Energy Market (NEM).”
In addition to the commitment to proceed with the project, ElectraNet has provided the AER with its latest review of the economic assessment of Project EnergyConnect considering recent announcements linked to the NEM.
“ElectraNet is mindful of the rapid pace of change across the NEM and the importance of the project delivering the expected benefits for customers,” Mr Masters said.
“We have modelled and considered the potential impact on the project’s benefits from recent policy and market developments – which were not included in AEMO’s 2020 Integrated System Plan – and have concluded that overall, the project benefits are likely to be higher than previously forecast.
“In fact, our latest economic assessment shows that, when combined, these recent market developments increase the expected benefits of the project by between $190 million and $440 million (present value) compared to the $1.9 billion previously reported in September 2020.”
Independent analysis shows Project EnergyConnect is expected to deliver net annual savings of around $100 for a typical household in South Australia and up to around $60 for a typical household in New South Wales – it will drive competition in the wholesale electricity market by connecting more, low-cost generation to the grid and support the ongoing transition to a lower carbon emissions future.