TransGrid, a transmission firm based in New South Wales, has pledged to invest $1.82 billion on a critical new transmission connection to South Australia after the Clean Energy Finance Corp stepped in to fix its financial problems with its largest-ever single financing loan.
The "transformational" new 900km link - planned to help South Australia's fast transition to 100% renewables and unlock billions of dollars of new wind, solar, and storage projects in three states - will go forward thanks to Transgrid's commitment to Project EnergyConnect.
On Monday, the Australian Energy Regulator cleared the project's costs, which would result in a minor rise in consumer bills before longer-term savings, and ElectraNet, South Australia's $457 million part of the $2.28 billion projects, is anticipated to be authorized as well.
It is one of the country's most major transmission investments.
It is deemed critical in NSW to assist the state in managing the fast-approaching retirement of its incumbent coal plants, and it will mean that the state will be linked to three separate states to export and import power as required. South Australia will now have two states to link to.
South Australia's energy minister, Dan van Holst Pellekaan, said the permits will save consumers $100 a year in the long run and safeguard them against blackouts.
"Project EnergyConnect will help safeguard South Australia from blackouts, turn the state into a national exporter of renewable energy, and ensure we meet our objective of cutting emissions by half by 2030," he said in a statement.
"There are large renewable energy projects that are shovel-ready and will create a jobs boom waiting for Project Energy Connect to be approved."
PEC will run from Wagga Wagga to the state boundary, where ElectraNet will extend the link to Robertstown, bring net benefits of up to $11.9 billion, and save NSW consumers $180 million per year or $64 per family, according to TransGrid CEO Paul Italiano.
EnergyConnect will be Australia's largest electricity interconnector built to date in the National Electricity Market, and it will assist speed Australia's energy transformation by linking customers to additional renewable power, according to Italiano.
Reducing Carbon Emissions
According to Italiano, the new link will reduce carbon emissions by an estimated one million tonnes per year, generate 1,500 construction employment in regional areas, and open the path for billions of euros in other wind and solar investment. According to him, there are 3GW of new wind and solar projects in the works in NSW alone.
Transgrid had earlier requested a regulatory change that would have enabled it to expedite consumer returns to help fund the project, but it was denied.
The CEFC, on the other hand, stepped in by issuing a $295 million hybrid debt product, which represents the institution's largest single investment since its inception over a decade ago.
Work on Project EnergyConnect is planned to begin by the end of 2021 and be completed in 2023, according to Transgrid.
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