Submission to ElectraNet’s SA Energy Transformation RIT-T

PIAC lodged a submission to ElectraNet’s Project Assessment Draft Report which explores options to facilitate South Australia’s energy transformation while improving system security and helping lower electricity prices. The report identified a high voltage interconnector between SA and NSW as the most efficient option.

ElectraNet has described this as a ‘no-regrets solution’ but PIAC questions whether this is truly the case due to: the long-term stability required to receive the modelled net market benefits; and the substantial misalignment between the allocation of costs and the accrual of expected benefits to consumers. The costs and expected benefits are disproportionately split between consumers in SA and NSW – for instance, analysis done by The Energy Project found that NSW consumers would pay 73% of the costs but only receive 40% of the expected benefits.

As such, PIAC recommends ElectraNet consider non-interconnector options be pursued in the short-term in order to examine a deferred, staged implementation of a SA-NSW interconnector. PIAC also recommends that alternative funding models be examined which reduce the risk to consumers from underutilization and balance the recovery of costs against the accrual of expected benefits.