Regulatory Action in Australia Casts Shadow Over Major Transmission Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--The future of Transgrid and Electranet's massive Project Energy Connect transmission project is in doubt after the Australian Energy Market Commission (AEMC) formally rejected a request from network companies to allow for increased early revenues from key network upgrades.

Transgrid believes the AEMC decision not only affects its project, but that it will impact other projects in the National Electricity Market that are not financeable under the current rules, because the projects would be rated sub-investment grade and not meet the Australian Energy Regulator's own rate-of-return requirements.

Following submissions made by Transgrid in relation to the rejection, AEMC intends to commence a broader review to consider options to support the efficient delivery of these major transmission projects.

Subject to the outcome of the AEMC decision and gaining all approvals, Project Energy Connect is expected to be built in phases, with the commencement of Phase I in 2021, creating approximately 200 jobs in South Australia and 1,500 jobs in New South Wales.

Industrial Info is tracking 24 transmission and distribution projects in Australia, with a combined value of more than $6 billion. Click here for a list.

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