Costs climb for NSW-SA grid interconnector

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Transmission company Transgrid says it has inked a new fixed-price contract with construction partner Elecnor Australia as it works to deliver the New South Wales (NSW) section of the 900-kilometre EnergyConnect transmission project before the end of next year.

EnergyConnect, a joint venture between Transgrid and South Australia network operator ElectraNet, will link Wagga Wagga in southwest NSW to Robertstown in South Australia via Buronga, with an additional spur link between Buronga and Red Cliffs in northwest Victoria.

The new high-voltage transmission line is seen as critical infrastructure that will improve grid reliability, expand the trade of electricity between states, and support the development of new wind and solar projects as coal-fired power stations are phased out.

Originally due to commence operations in 2023, the project has been hit by delays in construction and cost blowouts with Transgrid now saying construction of the 700 km NSW section of the project is scheduled for completion in September 2026.

To ensure this is achieved, the grid operator has negotiated a new fixed-price contract with Spanish contractor Elecnor, which took over the project when South African-owned contractor Clough Group collapsed in 2022.

Transgrid said the new contract – which puts the cost of the NSW section of EnergyConnect at $3.6 billion (USD 2.23 billion), well above the $1.82 billion originally approved by the Australian Energy Regulator (AER) – will ensure the project is delivered in the “most prudent and efficient manner,”  adding that Elecnor is best placed to “optimise delivery timeframes and minimise costs.”

Transgrid said the revised net project cost reflects unforeseeable factors including COVID-related global supply chain impacts on key equipment and materials, critical labour shortages, record inflation, and the impacts of the war in Ukraine.

While construction of the cornerstone project is now scheduled for completion in September 2026, Transgrid said works are progressing well with its western section, stretching 135 km from Buronga to the South Australian border, complete.

Energisation of this section, along with South Australian component of the project and the 24 km line from Buronga substation to the Red Cliffs substation in Victoria, was achieved in November and inter-network testing is continuing.

Transgrid said works on the remaining 540 km eastern NSW section, between Buronga and Wagga Wagga, and the Buronga, Dinawan, and Wagga Wagga substations, are continuing.

When complete, Project EnergyConnect is expected to allow about 2.5 GW of new solar, wind and energy storage projects to connect into the grid.

The interconnector will also reduce the risk of South Australia being “islanded” when its existing connection to the national grid, via Victoria, is lost.

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