Delays building renewable energy ‘superhighway’ raise power grid fears
By Nick Toscano
One of the most significant attempts to upgrade Australia’s outdated power grid is facing fresh delays, intensifying concerns in the industry about the faltering pace of the energy transition ahead of an approaching wave of coal-fired power station closures.
Dubbed an energy “superhighway”, Project EnergyConnect involves building a new 900-kilometre transmission line joining New South Wales, South Australia and Victoria that will pass through key renewable energy zones and make it easier to add more wind and solar farms to the network.
Not enough high-voltage power lines are being built to add wind and solar to the grid, putting Australia at a greater risk of blackouts as more coal plants retire.Credit: Joe Armao
However, Transgrid, the network company delivering the NSW section of the high-voltage link, has informed authorities of delays to its expected commissioning date, which will push back the project’s ability to run at full capacity by a year from July 2026 to July 2027.
The lack of enough high-voltage power lines to connect more wind and solar to major cities is becoming one of the greatest obstacles to expanding the clean energy rollout, putting Australia at a heightened risk of blackouts from extreme weather or supply shortfalls as coal-fired power plants retire. It is also jeopardising the federal government’s target to lift renewable energy to 82 per cent of the grid by 2030.
In an update to be released on Tuesday, the Australian Energy Market Operator (AEMO) says the impact of the EnergyConnect delays, as well as the mothballing of some gas- and diesel-powered generators in South Australia, had forced it to review its 10-year outlook for the eastern states’ grid and warn of an increased risk of “reliability gaps” in some regions.
AEMO chief executive Daniel Westerman said the news underscored the urgent need for more “timely investment” in projects capable of generating, storing and transporting electricity across the country.
“While new generation and storage capacity continues to increase, project development and commissioning delays are impacting reliability throughout the horizon,” Westerman said.
AEMO would contract back-up power supplies in NSW and Victoria to minimise reliability risks over the coming summer, it said.
Australia’s coal-dominated energy sector is undergoing a rapid transformation, with at least half of the remaining 14 coal-fired generators on the eastern seaboard due to close within the next decade, while renewable energy’s share of the energy mix continues to grow.
However, governments are becoming increasingly nervous that not enough renewable energy, storage and transmission projects are being built to keep power supplies and prices stable as the end of coal draws closer.
‘Australia’s great energy transition – from fossil fuels to renewables – is not going well.’
Tony Wood, energy director, Grattan Institute
While network operator ElectraNet has completed construction of the 200-kilometre South Australian component of EnergyConnect, Transgrid said it continued to progress work on the 700-kilometre NSW section.
Transgrid chief executive Brett Redman said the first stage of its project, previously scheduled to be in service for the June quarter of this year, was now due to be in service in the September quarter, at which time AEMO would commence inter-network testing.
The second stage of its project would be completed and in service by the June quarter of 2026, Redman said.
“Our key stakeholders, including the relevant government departments of SA, NSW and the Commonwealth, as well as the relevant ministers, have been advised,” he said.
As energy security fears build on the eastern seaboard, the Minns government in NSW has been in confidential talks with Origin Energy over potential financial support to prolong the operation of the Eraring plant on the shores of Lake Macquarie.
The Victorian government has already intervened to ensure two of its biggest coal generators – EnergyAustralia’s Yallourn and AGL’s Loy Yang A – do not shut prematurely.
“Australia’s great energy transition – from fossil fuels to renewables – is not going well,” said Tony Wood, energy director at research organisation the Grattan Institute.
“Governments have lost faith in the market being able to deliver enough electricity to the right places at the right time, consumers are fuming about high power prices, and investors have been spooked by frequent and unpredictable government interventions.”
The update to AEMO’s Electricity Statement of Opportunities report, which is typically published annually, only considers existing projects or those it considers to be “committed” or “anticipated”.
Westerman said the reliability outlook improved when factoring in possible energy projects deemed “actionable”, as well as the potential new capacity set to be brought to market via the first stage of the federal government’s capacity investment scheme, which targets 32 gigawatts of new backed-up renewable energy by 2030.
Read more:
- Payments for coal plants and urgent reform needed for renewables switch
- Explainer: How your electricity bill gets worked out
- Labor steps on the gas to fuel its climate targets
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