$2.4bn electricity line has ‘more costs than savings’
The cost of a new power line that would bring renewable energy from South Australia and send NSW's reliable electricity back has surged by 50 per cent to $2.4 billion.
NSW households and businesses face being asked to pick up a larger share of the project bill, even though there is no longer any net benefit for them, some analysts say.
"From the latest figures, the project will hit NSW energy users with more costs than savings," Public Interest Advocacy Centre (PIAC) energy policy leader Craig Memery told The Daily Telegraph. The 900km interconnector between Robertstown in SA and Wagga Wagga is being proposed by SA's grid owner ElectraNet, whose largest shareholder is the State Grid Corporation of China, and NSW's grid operator Transgrid, which is also mostly foreign-controlled.
Known as EnergyConnect, the project is backed by both state governments and Canberra, which has seen it officially fast-tracked.
Last year ElectraNet and Transgrid estimated the line's cost at $1.53 billion, with a net benefit to households and businesses of $924 million through lower bills. But now they say it will cost $2.43 billion. That increase has cut the net benefit by 84 per cent to $148 million. Yet the claimed reductions in customer bills have grown.
Originally, when the price tag was lower, NSW households were promised an overall saving of $30 a year. Under the higher costing, the saving has jumped to $64 a year.
Meanwhile the benefit to SA residents has risen from $66 to $100 annually. That mainly comes from a reduced reliance on gas for so-called "dispatchable" power when the wind isn't blowing and the sun isn't shining. SA has shut all its coal-fired power stations. And even though NSW households are still forecast to get a smaller benefit than those in SA, NSW's share of the bill has gone up from 75 per cent to more than 80 per cent, or $1.9 billion.
The dramatic change in the expected cost has led to calls for a freeze.
"This project should be put on ice," said PIAC's Mr Memery. "We are robbing Peter to pay Paul where Peter is NSW energy users and Paul is SA consumers," Mr Memery said.
The Energy Users Association of Australia (EUAA) said it was worried about another round of network "gold-plating" with consumers picking up the tab.
"It looks like an expensive project with marginal benefits and we are very nervous that it locks us into a 50-year repayment cycle," the association's CEO Andrew Richards said.
Labor's energy spokesman Adam Searle said there was a "strong need" to be able to move energy from one state to another, but the costs needed to match the benefits.
NSW Energy Minister Matt Kean said: "I expect the Australian Energy Regulator to run this project through the wringer and make sure it delivers a return for (NSW)."
Originally published as $2.4bn electricity line has 'more costs than savings'