The Federal Government has confirmed a $75.8 million underwriting agreement for early works for the Victoria to New South Wales Interconnector (VNI) West with transmission provider Transgrid.
The agreement is the result of the Federal Government’s plans to support critical energy infrastructure, to ensure continued reliability of the national energy grid so Australian households, businesses and industry can enjoy low energy prices.
VNI West is expected to deliver up to 1,800MW of additional capacity between New South Wales and Victoria.
This will enable greater utilisation of Snowy Hydro’s existing capacity and help unlock the benefits of Snowy 2.0’s on-demand, dispatchable generation to keep the lights on and prices low for consumers.
Further, it is expected to support the record levels of investment in renewables including household solar of which Australia is a world leader.
Through $75.8 million in underwriting, the Federal Government will enable New South Wales company Transgrid to commence community and stakeholder engagement, project planning and technical design.
This will ensure the VNI West interconnector remains on track and the delivery of Project Energy Connect (PEC), HumeLink and VNI West are well integrated.
The Federal Government’s commitment to VNI West forms part of their ongoing support for the development of major priority electricity transmission infrastructure in the National Electricity Market (NEM), in line with the Australian Energy Market Operator’s (AEMO) 2020 Integrated System Plan.
Federal Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said targeted action to support VNI West, an ‘actionable’ project in AEMO’s plan, continues the Federal Government’s record of putting the interests of consumers first and delivering affordable, reliable power.
“We are investing in VNI West because it is expected to generate $1.9 billion in net market benefits and will be a key part of an efficient transmission backbone for the electricity market,” Mr Taylor said.
“Our investment in this project will support reliable electricity supply, deliver substantial cost savings and help keep the lights on for Australian families, businesses and industries.
“This builds on the Federal Government’s record of judicious investment of over $800 million in priority transmission projects recommended by AEMO’s Integrated System Plan – projects that stack up for consumers.”
The Federal Government plans to continue to work with industry, government and relevant stakeholders to deliver the most cost-effective energy outcomes in the interest of consumers.
Transgrid Chief Executive Officer, Brett Redman, said, “The new 500kV interconnector would improve supply reliability and increase customer access to cheaper, cleaner electricity from generators like Snowy 2.0, as energy storage becomes critical to support growing renewables.
“We welcome the agreement, which will enable us to plan with confidence for a project identified by the Australian Energy Market Operator as critical to the delivery of a clean energy future.
“Transgrid will link South Australia with New South Wales and Victoria with the new interconnector EnergyConnect and delivering the ISP vision to reinforce the backbone of the east coast’s transmission network with another major transmission project HumeLink.
“Together, our major projects will transform the grid by enabling a significant increase in the amount of renewable energy that can be delivered to consumers across the National Electricity Market.
“By delivering a reliable transition to renewables, we will help drive down customer bills and help reduce carbon emissions for a cheaper, more reliable and sustainable clean energy future.”
The project’s regulatory assessment stage is expected to be complete by early 2023 and if a positive outcome is realised, the VNI West project will have a solid platform to progress with full development and delivery of the new interconnector.