The Victoria to New South Wales Interconnector West (VNI West) 500 kV double circuit transmission line connecting high voltage electricity grids in both states, has received an $840 million boost to progress early works on the nation-critical project.
Jointly developed by New South Wales grid operator Transgrid and the Transmission Company Victoria, a wholly owned subsidiary of the Australian Energy Market Operator (AEMO), the VNI West will connect major transmission projects, EnergyConnect in NSW and the Western Renewables Link (WRL) in Victoria.
The preferred route runs from Transgrid’s Dinawan substation north of Jerilderie in NSW to new substations proposed near Kerang and Bungana in Victoria.
A $700 million (USD 475.8 million) equity commitment has been received from Transgrid security holders and the Clean Energy Finance Corporation (CEFC) has also provided $140 million in concessional financing support, under the federal government’s $20 billion Rewiring the Nation (RTN) program.
This finance now allows Transgrid to progress early works including securing long lead equipment such as transformers, reactors, conductors and steel, a detailed design of substations and transmission lines, and market engagement to identify preferred construction contractors, environmental impact assessments and submissions.
Transgrid Chief Executive Officer Brett Redman said VNI West is essential to the delivery of Australia’s energy transition, meeting the Commonwealth and NSW governments’ net zero targets and providing consumers with access to cheaper renewable energy.
“The new transmission line will connect renewable energy zones in NSW and Victoria to the national electricity grid, delivering cleaner and cheaper electricity,” Redman said.
“The project is forecast to deliver around $1.4 billion in net market benefits. It will also make it easier to share electricity between NSW and Victoria, improving reliability and security of supply in both states.”
Image: Transgrid
The funds will also enable community and stakeholder engagement, including work to assess and progress negotiations to acquire substation and transmission line easements.
“As we advance the project to the early works phase, our team will continue to engage with landowners and regional communities. They are vital to the success of the clean energy transition and their feedback on this project has informed planning for VNI West,” Redman said.
“Transgrid has already achieved negotiated land access for 77% of the 235-kilometre route within NSW, to undertake environmental field studies and early site investigations.”
CEFC Chief Investment Officer (Rewiring The Nation) Paul McCartney said this is a critical decade for Australia to act if renewable energy and emissions reduction targets are to be achieved and build a clean energy network for our net zero future.
“While the scale of the investment task is considerable, we are also capturing large-scale economic, energy and emissions benefits. We are pleased to invest CEFC capital through the RTN Fund to enable Transgrid to complete early works that will help progress VNI West in New South Wales, an important project in Australia’s clean energy transition,” McCartney said.
The NSW Government recently recognised VNI West as critical state significant infrastructure, deemed essential to the state for economic, social or environmental reasons.
AEMO identifies VNI West as an actionable project in the recently released 2024 Integrated System Plan.
Transgrid’s security holders include UTA Power Networks Trust, Ontario Municipal Employees Retirement System (OMERS), Caisse de depot et placement du Quebec, Platinum Investments A 2010 RSC and Spark Infrastructure Group.
An electricity interconnector is a connection that allows power to flow in both directions between regions in the National Electricity Market (NEM), providing access to a larger number of electricity generators and greater ability to meet varying demand where and when needed most.
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