EUAA Submission: Stage 2 Draft Recommendations For The Transmission Planning & Investment Review
Emily Wood | July 14, 2022
‘We welcome the opportunity to make comment on the Stage 2 Draft Recommendations for the Transmission Planning and Investment Review (the Draft). We agree with the overall objective of the review to ensure the timely and efficient delivery of the required major transmission projects to achieve our net zero target.
We seek to achieve net zero at least cost, not at any cost and argue that an efficient transition requires efficient transmission investment. We do not believe that over investment in transmission, in scale (far too big), timing (far too early) and cost (far too expensive) represents efficient transmission investment and is not in the long-term interests of consumers. If governments or other stakeholders want transmission investment to exceed efficient levels, then they should be prepared to pay the extra cost.
Context
We would like to take this opportunity to provide a consumer context to the various debates around achieving net zero and the role transmission could play in achieving this. Our focus is on ensuring consumers only pay for an efficient level of transmission investment, that consumers are not bearing an unfair level of cost and risk and that communities who will be hosting the decentralised energy system of the 21st century are not collateral damage.
These can be distilled down into two aspects of social licence that the entire energy supply chain (and governments) must manage; customer social licence and community social license. Each are equally important to a successful energy system transition.
Customer Social Licence
We often hear that transmission costs are small in comparison to other elements (wholesale costs, environmental programs etc) and that consumers should just play their role and pay the bill. We also hear that the RIT-T is too cumbersome and should be weakened even further or even discarded. The 2022 ISP identifies that capex of $12.7 billion is required to deliver a number of high priority transmission projects. This figure is based on an AACE class 4 cost estimate (-15% to +50%).
Recent experience with both Project Energy Connect and Humelink tells us that costs always go up, never down. For example, the costs of Humelink increased nearly 250% from $1,350m in the PADR (January 2020) to $3,317m in the PACR (July 2021) which was still only a Class 4 estimate. Increase the ISP estimate by just 50% and $12.7 billion would quickly become $19 billion…’
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