The Australian Energy Regulator (AER) has approved a budget of $3,964.8 billion (USD 2,572.36 billion) for the construction of the second stage of the proposed Humelink project that is to deliver about 365 kilometres of 500 kV double-circuit transmission lines in southern New South Wales (NSW).
One of the state’s largest energy infrastructure projects, Humelink will connect Wagga Wagga, Bannaby and Maragle in southern NSW and increase the transfer capacity between that region and major load centres across the state. It will also connect the Snowy 2.0 pumped hydro project to the grid.
NSW transmission network operator Transgrid originally submitted an application for $4,279.1 billion in capital expenditure costs for the construction of the contentious project but the AER has substituted an alternative estimate that is $314.3 million less.
AER Chair Clare Savage said the regulator had undertaken a rigorous assessment of proposed costs to ensure consumers pay no more than necessary for delivery of the project.
“We are conscious that this decision comes at a difficult time for energy consumers, with many customers facing challenges to absorb higher electricity prices in the current economic climate,” she said.
The AER noted in its decision that Transgrid’s proposed capex had been overstated due a number of reasons, including outdated information, and its forecast of contingencies within its control.
“Transgrid provided a detailed cost build-up for 74 individual risk costs it expects to incur in the construction phase, which are not already included in its forecast of tendered works expenditure,” the regulator said.
“We consider that Transgrid overstated these costs by including risks not consistent with our guidance and overstated the value of these risks.”
The AER did accept all the proposed costs for engagement and social licence activities, with Savage saying it is critical for Transgrid to continue to engage with communities to achieve and maintain their support in delivering the HumeLink project.
“While HumeLink is a complex project of national significance, we recognise that it affects landholders and local communities on the transmission route and impacts electricity bills,” she said.
“We expect Transgrid to build and maintain social licence throughout the life of this project and respond to community feedback.”
The AER had already approved $608.6 million of costs for the first stage of the project, involving early project design work, stakeholder engagement, land-use planning and acquisition, procurement activities, and project management.
Transgrid expects to complete construction of the project in 2026–27.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.