The Morrison and Berejiklian governments will support the planned $175 million upgrade of the link between Queensland and New South Wales (NSW), one of the high priority projects for energy security amid coal-fired power plant retirements. Under the agreement, upgrades to the line will be brought forward to late 2021, delivering an extra 190 MW of capacity into NSW during peak demand periods.
The Commonwealth and NSW Governments will jointly underwrite up to $102 million, allowing TransGrid, the network transmission service provider for NSW, to fast track critical early works for the line ahead of the final regulatory determination of the Australian Energy Regulator (AER). Labelled as a high-priority project under the Australian Energy Market Operator’s Integrated System Plan, the NSW-Qld interconnector is expected to help mitigate energy supply risks poised by the scheduled closure of the Liddell power station in April 2023.
According to Transgrid’s earlier assessments, the expansion of the NSW-Queensland interconnector would be cheaper than building new generation to replace the Liddel plant. The network transmission service provider has also found that expanding the transfer capacity between NSW and Queensland would facilitate the transmission to lower carbon emissions “by further reductions in total dispatch costs, by enabling low-cost renewable generation to displace higher-cost conventional generation,” such as gas.
On top of that, the project would lead to “reduced generation investment costs, resulting from more efficient diversified investment and retirement decisions, due to high-quality wind, solar and pumped-hydro generation being able to locate at optimal locations rather than inferior locations limited by congestion on the existing transmission system,” Transgrid said in a recent report.
The clean energy industry has congratulated the Morrison and Berejiklian Governments for underwriting the early stages of an upgrade to the NSW-QLD electricity interconnector, recognising the critical nature of transmission investment for the future of Australia’s power system.“Better interconnection between the regions will be increasingly important to build a more flexible and resilient power system as we move towards cleaner sources of energy,” said Lillian Patterson, Clean Energy Council Director Energy Transformation.
Transmission and grid connection were the highest priorities for executives in the clean energy industry in the last two Clean Energy Outlook surveys, which are conducted every six months. Other crucial transmission projects involve an upgrade between Victoria and NSW and a new link from South Australia to NSW, with the latter one critically important for a great number of massive wind, solar and storage along the line.