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New interconnector to cost up to $2.5 billion: ElectraNet

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A new electricity interconnector to one of the eastern states would cost between $500 million and $2.5 billion, says a report from the owner of South Australia’s electricity transmission infrastructure.

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Electranet this morning published a report outlining four options for a new interconnector, which it says could be operational by 2021 or 2022.

It follows the statewide blackout in September, which has been attributed to a series of events that led to an overload of the Heywood Interconnector to Victoria.

According to the report, a new interconnector could force electricity prices down and address energy security concerns.

“Additional interconnection between National Electricity Market (NEM) regions can result in greater competition between generation sources, thereby delivering lower overall energy prices for customers, in addition to facilitating an increase in renewable generation and addressing security of supply concerns associated with energy market transition,” the report says.

It estimates the cost of building a new interconnector from central South Australia to Victoria to be $500 million to $1 billion; from mid-North SA to New South Wales as $500 million to $1.5 billion; from northern SA to NSW as $1.5 billion to $2 billion; and from northern SA to Queensland as $2 billion to $2.5 billion.

ElectraNet chief executive Steve Masters said in a statement this morning: “South Australia needs a long-term solution that will facilitate our energy transformation, while improving system security and placing downward pressure on electricity prices,”

“One credible option is a new interconnector between South Australia and the eastern states, which would increase access to lower cost generation and allow system security services to be shared across regions.

“Countries such as Denmark, Germany and the United Kingdom also source a high percentage of their energy needs from renewable generation, but have much stronger interconnection that has enabled its integration.”

Masters added that while a new interconnector was a credible option, “we mustn’t pre-empt the process and automatically presume a new interconnector will prove to be the best solution”.

“We’re particularly keen to hear from anyone that thinks they might have a suitable non-network option that should be thrown into the mix,” he said.

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