Sydney grid bottleneck threatens power supply expansion

Transmission limits tightened as demand rose across Sydney and surrounding cities.

Australia’s Transgrid has begun modelling and technical analysis to strengthen transmission capacity into South Western Sydney.

This is in response to the Australian Energy Market Operator’s (AEMO) Integrated System Plan and pressure on existing infrastructure from population growth and electrification.

This comes as New South Wales (NSW) has begun early planning for major electricity network upgrades to increase power supply into Greater Sydney, Newcastle, and Wollongong as coal-fired power stations retire and demand rises.

The operator is assessing options for the Sydney Ring South project, which includes a potential high-voltage transmission line between Bannaby in southern NSW and South Western Sydney.

The project aims to increase the flow of electricity from renewable energy (RE) zones in regional NSW and interstate into major demand centres.

Jason Krstanoski, Executive General Manager of Network at Transgrid, said the existing southern transmission corridor into Sydney faces congestion as coal generation exits the system and renewable supply increases outside metropolitan areas.

AEMO has identified Sydney Ring South as a long-term option to improve electricity security for Sydney, Wollongong, and Newcastle, which account for most of NSW electricity demand.

Krstanoski said the project could reduce average annual electricity costs by up to $36.69 (AU$51) for households and about $79.14 (AU$110) for small businesses, based on modelling.

The proposed upgrade would connect Greater Sydney to RE projects and interconnectors including EnergyConnect, HumeLink, and VNI West, as well as Snowy 2.0 and RE zones in NSW.

The Project Assessment Draft Report sets out six technical options for Sydney Ring South.

Transgrid has identified a preferred option that includes upgrades to the existing 330 kilovolts (kV) network by 2030–2031 and a new 500 kV transmission line from near Bannaby to South Western Sydney.

The company said the option would more than double capacity along the southern corridor into Sydney.

Transgrid estimates the preferred option would deliver about $2.30b (AU$3.2b) in net market benefits for NSW consumers and the broader economy.

The project would support electricity supply to Western Sydney and industrial users, including manufacturing, logistics, health, education, aviation, and data centres.

It would also support demand from Western Sydney International Airport and the City of Bradfield development.

Transgrid has opened consultation on the Project Assessment Draft Report and invited submissions ahead of a 28 August deadline.

The report remains at an early planning stage and no final route or corridor has been selected.

(US$1 = AU$1.39)