Infrastructure projects that enhance electricity transmission capabilities are pivotal in shaping a nation’s energy landscape in an era defined by the pressing need for sustainable energy solutions. Victoria, a southeastern state of Australia, has taken a significant stride towards modernising its power transmission network with the groundbreaking Victoria to New South Wales Interconnector West (VNI West) project. This ambitious endeavour aims to establish Australia’s longest power line, revolutionising how electricity is transmitted across the region and unlocking numerous economic and environmental benefits.
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What is the VNI West project?
The VNI West project is a proposed new high-capacity 500 kV double-circuit overhead transmission line between Victoria and New South Wales. Transgrid and AEMO Victoria Planning (AVP) are jointly developing the project. VNI West is a core component and priority project in AEMO’s 2022 Integrated System Plan, which confirms the need for both short- and longer-term investment to increase the transfer capacity between states in the National Electricity Market (NEM).
The project will connect Victoria’s Western Renewables Link (WRL) to EnergyConnect in New South Wales. The WRL is a proposed new transmission line that will connect wind and solar farms in the Murray River region of Victoria to the NEM. EnergyConnect is a proposed new transmission line connecting renewable energy projects in New South Wales to the NEM.
VEPC: Transmission charges at VNI West will more than double
Announced against increasing concerns about energy security, grid stability, and the transition to renewable energy sources, the VNI West project is a joint venture between the Victorian and New South Wales governments. The project is designed to span approximately 900 kilometres, linking the renewable energy-rich regions of Victoria to New South Wales. The proposed high-capacity transmission line is poised to impact the energy sector substantially, offering improved grid reliability, enhanced interconnection and facilitating efficient renewable energy transportation across state borders.
A new report and plan by the Victoria Energy Policy Centre (VEPC) has warned that Victorians face a more than doubling of transmission charges on their electricity bills if the state government proceeds with plans for the proposed VNI West transmission line. The VEPC is a non-profit think tank that provides independent analysis and advice on energy policy.
The VNI West line is a 500 kilovolt (kV) line linking Melbourne’s outskirts with Wagga Wagga in New South Wales. It is the longest single power line in Australia’s history and is estimated to cost $11 billion.
The VEPC report argues that the VNI West line is far costlier than alternatives and faces extensive landholder opposition. It also says the line will not solve grid bottlenecks holding back the state’s new solar and wind farms.
The report estimates that the Victorian portion of the line alone will cost $4.9 billion in current dollars. Add in a further $3 billion needed for upgrades to the existing 220kV networks to integrate VNI West, and the full cost could swell to $11 billion and lift Victorians’ transmission charges by at least 124%.
The VEPC report has been welcomed by critics of the VNI West line, who argue that it is a waste of money and will not deliver the benefits that the government claims.
The VEPC has defended its plan, saying it is more cost-effective and less disruptive than the VNI West project. The VEPC has also said that its plan would still allow for significant renewable energy generation in Victoria.
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AEMO responds to VEPC's alternative plan for VNI West
The Australian Energy Market Operator (AEMO) has responded to the Victorian Energy Policy Centre’s (VEPC) alternative VNI West transmission project plan. The VEPC’s plan proposes several changes to the VNI West project, including a different route, a lower voltage, and a smaller capacity.
AEMO has said that the VEPC’s plan would not be as effective as the original VNI West project regarding increasing renewable energy generation and reliability in Victoria. AEMO also said the VEPC’s plan would be more expensive and take longer to build.
AEMO also found that the VEPC’s plan makes some inaccurate statements about the VNI West project. For example, the VEPC claims that the VNI West project will not increase the renewable hosting capacity of the Murray River Renewable Energy Zone (REZ). However, AEMO has found that the VNI West project will actually open up the opportunity for higher capacity connections to the REZ.
AEMO has concluded that the VEPC’s alternative plan is not viable for the VNI West project. The original VNI West project remains the best option for supporting renewable energy development and ensuring the security and reliability of the electricity grid.
The debate will continue for some time
The VEPC report has provided a valuable contribution to the debate, and it is clear that there are serious questions about the project’s viability. The government must carefully consider these questions before making a final decision.
The AEMO’s response to the VEPC’s alternative plan is a significant development in this debate. The AEMO is the independent body responsible for managing the electricity grid in Australia. Its assessment of the VNI West project is likely to carry significant weight with the decision-makers.
The debate over the VNI West project will likely continue in the coming months. The AEMO’s response is a major development in this debate, but it is not the final word. The government will ultimately make the decision of whether or not to proceed with the project.
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