Investment jolt for electricity network

Adelaide Advertiser
Wednesday 8/12/2010 Page: 63

UP to $6 billion could be spent on South Australia's electricity transmission network by 2020 as demand for power increases, ElectraNet chief executive Ian Stirling said. Mr Stirling expected at least a $2 billion capital injection over the next 10 years with the potential investment increasing to $6 billion "if all the planets aligned".

"There could potentially be $6 billion of transmission development in South Australia in the next 10 years. That's probably the high side", Mr Stirling said at the SA Infrastructure Summit 2010 in Adelaide yesterday. "This would be driven by the mining sector and the need to be able to deliver new generation".

He said the need for a new electricity interconnector between SA and New South Wales, more demand for green power and a "decent carbon price" would also drive investment higher. Meanwhile, SA had enough electricity generation capacity for the next few years with the new Cherokee gas fired electricity power station to be built near Mannum to help meet the peak demand. The power station is expected to reach maximum capacity of 1000MWs by 2021, capable of meeting up to 25% of the state's peak demand.

Wind farm power generation capacity coming on stream also would meet demands for at least five years. But it would be at least 15 years before renewable energy sources, such as geothermal, became key to the state's electricity baseload with more gas-fired power stations to till the gap until then.

ElectraNet owns 6000 circuit kilometres of wires and 79 substations in the state and has invested $800 million in transmission in SA since 2000. It generated revenue of $3 billion last financial year and represents about 10% of the price of power paid by South Australians.

Meanwhile, Mr Stirling said expected electricity price rises may be partly offset over the next few years as "ramp gas" or gas from coal seam gas producers in New South Wales and Queensland was dumped on to the market. "This may affect the profitability of generators in Queensland", he said.