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The Australian Energy Regulator (AER) has approved the SA-NSW Interconnector, which will deliver cheaper, cleaner and more reliable electricity to South Australian households and businesses.

According to the AER, the interconnector project satisfies the regulatory investment test for transmission (RIT-T), which demonstrates the project will deliver benefits to energy consumers.

Construction can now commence on the interconnector, which is expected to be completed progressively through 2022 to 2023.

South Australian Minister for Energy and Mining, Dan van Holst Pellekaan, said that the Australian Energy Market Operator (AEMO) has deemed the 330kV interconnector to be built by ElectraNet and Transgrid between Robertstown and Wagga Wagga as a “no-regrets” measure which is a priority project in the national transmission plan.

“The Australian energy landscape will be completely transformed during coming decades and the lesson of the recent past is that we need to take actions ahead of time to secure the best outcome for consumers,” Mr van Holst Pellekaan said.

“This project will unlock huge new renewable energy zones in South Australia and New South Wales, with AEMO reporting there are more than 5000MW of planned renewable energy projects in close proximity to the interconnector.

“The AER’s determination shows that South Australian wind and solar power can play a bigger national role with the interconnector, delivering more jobs and growth in South Australia.”

Mr Holst Pellekaan said the interconnector will also improve South Australia’s electricity systems resilience to external shocks.

“With climate change leading to increased extreme weather conditions such as storms, floods and fires, being interconnected with just Victoria leaves South Australia at real risk of becoming disconnected from the rest of the market,” said Mr Pellekaan.

“The SA/NSW Interconnector makes us part of the loop, giving South Australia two connections to the National Electricity Market.”

Energy Networks Australia has welcomed the approval of the interconnector, commenting that the Project EnergyConnect transmission line will enable New South Wales to import cheap renewable electricity from South Australia when there’s an excess, as well as allowing South Australia to import more power from New South Wales and Victoria when there’s not.

Energy Networks Australia CEO, Andrew Dillon, said the new interconnector would support a more resilient electricity system while putting downward pressure on wholesale prices – and customer bills.

“A more interconnected electricity market is more efficient, reliable and flexible and will help lower power prices for customers,” Mr Dillon said.

“This is a critical link to the development of a more connected National Electricity Market that better enables the transition to a low-emissions energy future.”

Clean Energy Council Director Energy Transformation, Lillian Patterson, said the decision was a positive move by the AER as it demonstrates the benefits that interconnection and renewables have for consumers.

“We strongly support the project, which passes through multiple renewable energy zones and will allow new renewable energy projects to connect to the National Electricity Market,” Ms Patterson said.

“This interconnector is important for the future of Australia’s National Electricity Market, as it builds a more flexible and resilient power system with more sources of clean energy.”

Charlotte Pordage is Editor of Utility magazine, a position she has held since November 2018. She joined the team as an Associate Editor in October 2017, after sharpening her writing and editing skills across a range of print and digital publications. Charlotte graduated from Royal Holloway, University of London, in 2011 with joint honours in English and Latin. When she's not putting together Australia's only dedicated utility magazine, she can usually be found riding her horse or curled up with a good book.

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