Regulator gives tick to upgrade
The existing Heywood Interconnector had mostly been used to export power to SA until the rapid expansion of wind farms in the state led to an increase in electricity flowing the other way.
The installation of a third transformer at Heywood, in western Victoria, and other upgrades would generate $190 million in net market benefits, the AER said.
"A key market benefit of the proposed interconnector upgrade is higher use of lower-cost generators, such as wind in South Australia and base-load capacity in Victoria," the regulator said. "Increases in these sources of generation displace higher fuel-cost generation from new and existing generators in South Australia and NSW."
The upgrade will increase capacity by 40 per cent to 650 megawatts, and avert a potential constraint on future wind farms in SA, said Rainer Korte, an executive manager at SA's ElectraNet, which will build the South Australian portion of the upgrade.
The AER's approval came despite opposition from some generators, such as NSW's Macquarie Generation, which argued wholesale prices would be lower after the upgrade.
The transmission upgrade would be completed by the second half of 2016, Mr Korte said.
Frequently Asked Questions about this Article…
The AER approved a $108 million transmission upgrade to the Heywood Interconnector between South Australia and Victoria, including installing a third transformer at Heywood and other works to increase cross‑state transfer capability.
The upgrade increases capacity by about 40% to 650 megawatts, which should allow South Australia’s growing wind generation to export more electricity to Victoria and avoid a potential constraint on future wind farms in SA.
The AER estimated the upgrade would generate about $190 million in net market benefits by enabling greater use of lower‑cost generators (like South Australian wind and Victorian baseload) and displacing higher fuel‑cost generation in South Australia and NSW.
ElectraNet will build the South Australian portion of the Heywood Interconnector upgrade, according to Rainer Korte, an ElectraNet executive manager.
Yes — some generators opposed the proposal. For example, NSW’s Macquarie Generation argued that wholesale electricity prices would be lower after the upgrade, which was part of the opposition to approval.
Installing a third transformer at Heywood and related upgrades will help accommodate the increasing volume of electricity flowing from South Australia to Victoria (driven by wind farm expansion) and improve the interconnector’s ability to transfer power both ways.
The approved transmission upgrade has a price tag of $108 million and will raise the Heywood Interconnector’s capacity by about 40%, taking it to approximately 650 megawatts.
According to ElectraNet’s Rainer Korte, the transmission upgrade was expected to be completed by the second half of 2016.
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