Australia clears $ 1.8 billion power line to boost renewable energy

Band Sonali Paul

MELBOURNE, May 31 (Reuters)Australia on Monday approved an A $ 2.28 billion ($ 1.76 billion) project to build the country’s longest transmission line, which the operator of the country’s energy market considers it essential to manage the supply of electricity from new wind and solar farms.

The Australian Energy Regulator, whose role is to ensure that electricity customers do not face excessive bills, has approved the 900 km (560 mile) EnergyConnect project between South Australia and New Zealand. -South Wales after companies cut its cost by 4%.

EnergyConnect, developed by TransGrid and ElectraNet, is one of several interconnectors that the Australian energy market operator has said are necessary to avoid blackouts, while keeping a lid on electricity prices.

“EnergyConnect … will help accelerate Australia’s energy transition by connecting customers with more renewable generation,” TransGrid chief executive Paul Italiano said in a statement.

The Australian grid was designed to supply electricity from permanently built coal-fired power plants near three major mining regions. But it has run into problems over the past five years as wind and solar farms, providing intermittent power, have connected to parts of the grid in remote places where capacity is limited.

The energy market operator predicts that EnergyConnect could pave the way for up to 1,800 megawatts of low-cost renewable power generation in South Australia, New South Wales and Victoria.

Funding was delayed as regulators refused to revise cost recovery rules, which TransGrid and ElectraNet said made it difficult to align debt financing for the project.

To bring the project to fruition, TransGrid said Monday it had secured A $ 295 million in hybrid debt financing from Clean Energy Finance Corp. of the national government. South Wales and helped reduce the final cost of the project.

ElectraNet said it would spend A $ 457 million on the South Australian section.

TransGrid is owned by Spark Infrastructure SKI.AX and a consortium of investment funds. ElectraNet is owned by the international branch of State Grid Corp of China, the Malaysian company YTL Power Investments Ltd and the Australian Utilities Trust.

(1 USD = 1.2953 Australian dollars)

(Reporting by Sonali Paul; Editing by Kenneth Maxwell)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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