New $1.53B NSW-SA electrical interconnector expected to reduce electricity prices for SA, NSW and Victoria

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A $1.53 billion New South Wales-South Australia electrical interconnector is expected to ease spot and futures prices are expected to unlock large amounts of new electricity supply and increase reliability in New South Wales and South Australia, with a knock-on effect in Victoria.

Reliability of supply is one of the most crucial factors in maintaining market pricing stability, in terms of spot and futures prices.

Linking the two states and unlocking further electricity transfer to Victoria will strengthen the National Energy Grid’s stability and in turn, ease pressure on spot and futures prices due to more availability of dispatchable energy. 

Australian Energy Regulator finds substantial benefits in NSW-SA electrical interconnector

The EnergyConnect project was given the green light by the Australian Energy Regulator.

The NSW-SA electrical interconnector was predicted to offer benefits to the tune of $924 million by South Australian grid owner Electranet, but the AER found that it will deliver a third of that at $269 million.

The AER said this was because Electranet overestimated the amount of gas-fired energy that would be needed to keep the lights on if it wasn’t built.

The regulator stated that what was on the table still offered significant benefits. 

The Australian Energy Market Operator has classed this project as a priority to firm up the grid in view of the ever-increasing amount of solar and wind power, which is intermittent. 

Put simply, when the sun is not shining or the wind is not blowing, there can be shortfalls in supply. 

Hot days drove electricity prices through the roof due to flagging wind generation

A spike in spot wholesale prices was registered on March 1, 2019, when temperatures in Adelaide and Melbourne exceeded 38C was due to limited availability of wind.

Prices briefly went through the roof at $12,635/MWh – compared to 2018 averages of just over $90/MWh in SA – because of the shortfall.

Only 390MW of the 2.400MW of installed wind power capacity was available across SA and Victoria.

The interconnector aims to smooth out such spikes and offer long term stability of both spot and futures prices.

ElectraNet aims to have it up and running by 2022.

The 900-kilometre cable will also see a number of wind and solar farms spring up along the route. 

Four huge solar farms — three in SA and one in NSW — are planned on the route of the line which stretches from Robertstown in SA’s Mid North and Wagga Wagga in NSW.

Solar River Project

Company: Solar River
Location: 30km southwest of Robertstown substation
Size: Stage 1 is a 200MW solar PV (photovoltaic) array with a 120MWh battery. Stage 2 is an additional 200MW solar PV system with 150MWh battery.
Cost: $450 million

Robertstown Solar

Company: Energy Projects Solar (EPS) Pty Ltd
Location: 5km northeast of Robertstown, adjoining substation
Size: 500MW solar PV system with a 250MW/1000MWh battery system
Cost: $1.17 billion

Riverland Solar and Battery Project

Company: Lyon Group
Location: About 8km east of Morgan
Size: 253MW solar PV system with an 80MW/320MWh battery
Cost: In excess of $500 million
Jobs: 270 construction jobs; the number of operational jobs yet to be announced

Yarrabee Solar Project

Company: Reach Solar Energy, which developed the Bungala solar project near Port Augusta
Location: Yarrabee Park, Narrandera, NSW
Size: 900MW solar PV (largest in NSW) with 35MW/70MWh battery
Cost: $957 million

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