Think Tank: Australia’s Transmission Projects Allowed to Escape Close Examination
With $9 billion at stake, it’s very important to be transparent and follow the process.
Two major renewable energy transmission projects in Australia have received approval without undergoing a mandatory scrutiny process, potentially risking $9 billion (US$5.9 billion) of taxpayer money and allowing cost blowouts to go unnoticed.
New South Wales (NSW) grid operator Transgrid is undertaking three large transmission projects simultaneously.
These projects include HumeLink, which will link the new Snowy Mountains Hydroelectric Scheme and renewable energy sources in South West NSW to Sydney, Wollongong, and Newcastle via the Bannaby substation.
Other projects are VNI West, which will connect the grids in NSW and Victoria, and EnergyConnect, which will transport energy through South Australia, Victoria, and NSW.
However, the think tank Centre for Independent Studies (CIS) revealed that the Humelink and VNI West projects were exempted from a mandatory consultation process.
The CIS Energy Program Director Aidan Morrison cautioned that skipping the consultation process could lead to $9 billion in additional costs for consumers.
“With $9 billion at stake, it’s very important to be transparent and follow the process,” Morrison emphasized.
Morrison further expressed concern about “substantial cost increases in these projects—more than $1.5 billion—yet AEMO keeps revising the net benefits of these projects upwards to justify continuing with them.”
HumeLink is estimated to cost $4.88 billion, while VNI West is estimated at $3.96 billion.
Morrison also highlighted a rule change request by Energy Minister Chris Bowen, which aims to enable AEMO to avoid consultation over Feedback Loop notices.
“There appears to be a coordinated push to avoid scrutiny over the energy transition,” Morrison stated.
Project Timelines Questioned
According to the AEMO Integrated System Plan, HumeLink is expected to be operational by 2026, VNI West by 2031, and EnergyConnect by 2024-2025.
However, Morrison raised concerns about Transgrid rushing the projects forward, urging for their delay or cancellation.
He criticized the rush for approvals for Humelink and questioned the legal basis for the AER waiver to skip the consultation process.
