Australia completes $1.4b funding with New South Wales for transmission line

A five-year agreement is expected to stabilise the NSW grid and cut power prices.

The Australian government has concluded a AUD2bn (US$1.4bn) joint funding agreement with the state of New South Wales (NSW) to develop two interstate power transmission lines (the HumeLink interconnection line from Snowy Hydro to southern NSW, and the Queensland-NSW interconnector project), upgrade parts of the power network on the east coast, and support CO2 emission reduction projects. The 5-year agreement is expected to stabilise the NSW power grid, reduce electricity prices and foster wind, solar and hydropower projects. In addition, the NSW government committed to supply an additional 70 PJ/year of gas to the east coast market, from Santos' proposed Narrabri coal seam gas field, which is awaiting approval from the Independent Planning Commission, or from one or two LNG import terminal projects.

Australia is currently facing tense power supply conditions, after one of the two power transmission lines between Victoria and South Australia tripped, reducing electricity exchanges between the two states. The Australian Energy Market Operator had to tap emergency power reserves and to dispatch reserve power, while calling on large electricity consumers to reduce their consumption to avoid blackouts. Wholesale electricity prices have surged to the market cap of AUD14,700/MWh (US$9,840/MWh) in Victoria and reached AUD13,000/MWh (US$8,700/MWh) in New South Wales, before falling to AUD100/MWh (US$67/MWh) in Victoria and AUD90/MWh (US$60/MWh) in NSW.

This article was originally published by Enerdata.