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 Australian Energy Regulator approved a $108 million transmission upgrade to the Heywood Interconnector between South Australia and Victoria, including a third transformer at Heywood and other upgrades.
The upgrade will allow South Australia’s wind farms to export more electricity to Victoria by increasing the interconnector’s capacity and preventing a potential constraint on future wind developments in South Australia.
The upgrade will increase capacity by 40%, taking the interconnector up to about 650 megawatts.
The AER estimated the upgrade would generate about $190 million in net market benefits, largely from higher use of lower‑cost generation like South Australian wind and Victoria’s base‑load capacity displacing higher fuel‑cost generation.
ElectraNet will build the South Australian portion of the Heywood Interconnector upgrade.
Yes — some generators, including NSW’s Macquarie Generation, opposed the approval. The article notes Macquarie Generation argued wholesale prices would be lower after the upgrade.
According to Rainer Korte of ElectraNet, the transmission upgrade was expected to be completed by the second half of 2016.
The AER said the upgrade supports higher use of lower‑cost generators in South Australia and base‑load capacity in Victoria, which can displace higher fuel‑cost generation in South Australia and NSW — contributing to the net market benefits identified.
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