James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I'd like to take this opportunity to welcome an exciting decision this week, which was the Australian Energy Regulator's decision to approve the RIT-T, the regulated investment test transmission, for the South Australia-New South Wales Interconnector. This is a project that's been in the pipeline for quite a few years now. In essence this, the final hurdle, is the regulator approving the two investment partners, ElectraNet and TransGrid, on the numbers that they've submitted, to proceed to undertake that project—because they obviously get a guaranteed return on the capital that they invest and, of course, pass on the relevant cost of that into the transmission grid—and see the grids of South Australia and New South Wales plugged together. This is not only a milestone in energy security for my home state of South Australia but also an opportunity for enormous generation investment in South Australia. We're currently interconnected to the national grid through Victoria, the Hayward line, which is an 800 megawatt line. There is a small link through the Riverland, the Murray link, but that is under 200 megawatts. This is a 750 megawatt connection into New South Wales, so we're effectively doubling the amount of electricity that can come into South Australia but also that can go out of South Australia at any point in time to nearly 1,500 megawatts. That, at times, is less than the total consumption in the grid of South Australia, so it certainly will change the dynamic that led to the blackout in South Australia in September 2016 when the Hayward line went down and the South Australian grid had to shut down. But, on a more positive note, it means of course that South Australia can double our potential energy export into the rest of the National Energy Market.

We have enormous generation potential in South Australia, particularly across renewables. What's holding us back is that the total amount that we can export out of our grid on top of what we're consuming in our grid is obviously a fixed amount. This increases that by 750 megawatts, so there'll now be so many investment decisions that can be made on the basis of the amount of electricity generated in South Australia which can, of course, go to so many more markets—750 megawatts worth of electrons in fact, once this piece of infrastructure is installed.

It also means that we can balance the intermittency of the generation blend in South Australia at the moment and have more reliability in our grid. Of course, one of the significant issues that led to the blackout in South Australia in 2016 was that intermittency. The fact that we lost the Hayward line, we had a dramatic drop in generation due to weather events and the frequency in the system fell very suddenly, the whole system shut down and took four hours to switch back on. So, with another 750 megawatt interconnector to a different energy market, being New South Wales, that of course means that scenario can't possibly ever happen again. But, as I say, more importantly, it also means that a whole range of investment decisions will change in their dynamic because of the increased export opportunity.

That'll be great for South Australian energy consumers as well, because, if the financial palatability of some of these projects is much more significant now, thanks to this interconnector, then the domestic market always benefits before the export market. It means that when we have new projects coming online in important renewable sectors, like grid-scale solar and of course more windfarms and other potential projects as new technologies become more commercialised into the future, that will benefit the South Australian energy consumer first but it will also benefit our economy, because we can definitely be, in South Australia, an exporter of generated electricity into the grid. I know there are so many people, particularly significant businesses, waiting to see this milestone reached, to have the confidence that the interconnector will be going ahead, so that they can commensurably make their decisions on their investments for more generation in South Australia.

It's very exciting from the jobs point of view, it's very exciting from an electricity consumer's point of view in South Australia and it's very exciting from an energy security point of view in South Australia. This is a great decision. We've been waiting a long, long time for it. It gives great confidence now that this project will go ahead, and the South Australian economy and South Australian consumers will be all the better for it.