Friday, 24 January 2020
The South Australian Business Chamber welcomes the Australian Energy Regulator’s decision today, which endorses ElectraNet’s proposal to build a $1.53 billion electricity interconnector between SA and NSW.
While the net benefits of this project have reduced under the modelling relied upon by the AER, they remain positive and advocate strongly for the investment decision to continue.
The future capacity of South Australian businesses to access baseload power when renewable energy is unavailable will be increased through enhanced interconnection, particularly when ‘Snowy 2.0’ is complete. The ability of the local grid to cope with excess renewable energy generation in times of insufficient local demand will also be assisted by another interconnector.
The South Australian Business Chamber Executive Director Industry & Government, Anthony Penney, stated that the interconnector will benefit South Australian businesses by both lowering their bills and providing them with more options to access baseload power interstate.
“The South Australian Business Chamber has long provided conditional support for the interconnector to New South Wales based on rigorous cost-benefit analysis demonstrating the project will result in lower bills for South Australian businesses,” Mr Penney said.
“The South Australian Business Chamber recognises with growing renewable energy generation and less availability of baseload power, that consumers need greater connectivity across the entire national electricity market (NEM) and we welcome today’s decision as a significant step towards that outcome.”
While the AER’s decision today showed reduced benefits of the project, the South Australian Business Chamber welcomes their conclusion that the project overall was still NPV positive, finding the costs are still going to be more than offset by the benefits.
The South Australian Business Chamber encourages both ElectraNet and the AER to continue working hard to ensure that as this project moves towards contingent funding approval, that all reasonable steps are taken to ensure it can be delivered for the most efficient cost possible.
South Australian businesses have borne the brunt of high electricity prices for too long and any new regulated utility network investment must be stress tested to ensure it provides longterm value for customers. Ongoing reliability is also important, particularly after events of recent years, and the South Australian Business Chamber is mindful that increased interconnection to the Eastern States should ultimately provide local businesses more long-term security, particularly with the advent of Snowy 2.0.
“Now that this major decision hurdle has passed, we encourage both the AER and ElectraNet to work hard to ensure that the interconnector can be delivered as soon as is practicable while ensuring costs are kept to a minimum” Mr Penney said.
