Regulator approves costs for HumeLink early works

Network owner Transgrid announced the Australian Energy Regulator’s (AER) had approved all of the requested funding for Stage 1 of the multi-billion-dollar HumeLink project which will reinforce the transmission network in southern New South Wales (NSW) and unlock the full capacity of the federal government’s 2 GW Snowy 2.0 pumped hydro project.

HumeLink will deliver about 360 kilometres of 500 kV double-circuit transmission lines, connecting Wagga Wagga, Bannaby and Maragle in the state’s south, improving the flow of electricity between new generation sources and the state’s major demand centres. It will also include the construction or upgrades of 500/330 kV substations at the three locations.

The project, which is expected to cost an estimated $3.3 billion in total, has been deemed essential for the success of the 2,040 MW Snowy 2.0 pumped hydro project. Due to come online by 2026 but now not expected to be operational until at least 2028, Snowy 2.0 shapes as the largest single-point load yet to be connected to the National Electricity Market and the largest generator to be connected to the main grid in more than three decades.

The AER has approved Transgrid’s proposed cost of $321.9 million for Stage 1 of the HumeLink project. The funding will be used to conduct early works including project design, stakeholder engagement, land-use planning and approvals and acquisition, procurement activities, and project management.

Transgrid said it has already issued an Expression of Interest for key delivery partners to design, install and commission the infrastructure.

Transgrid chief executive officer Brett Redman said the funding agreement is an indicator of the confidence the regulator has in the HumeLink project, “which will reinforce the backbone of the transmission network for the eastern seaboard”.

“The $322 million in capital expenditure represents the next step in bringing more affordable, reliable and renewable energy to the grid as we deliver a next-generation transmission capability for NSW and the National Electricity Market,” he said.

“There will be no transition without transmission, and we will continue to work closely with the Australian Energy Market Operator (AEMO) and the federal and state governments to accelerate this transition, which is dependent on a stronger, more flexible electricity network.”

The AER’s decision coincides with the release of Transgrid’s Annual Planning Report (TAPR) which for the first time, projects a shortfall of system strength and inertia to meet system requirements to happen in this decade, as coal-fired generation is retired or moves to more flexible operation.

“Australia’s energy transition is happening right now. The electricity system is transitioning away from coal and towards renewables at a rapid rate, even faster than expected and we are responding to that reality,” Redman said.