South Australia New South Wales Interconnector analysis
In 2018, ACIL Allen was engaged by ElectraNet to provide preliminary estimates of the impact of a new interconnector between New South Wales and South Australia as an input to its Project Assessment Draft Report.
The modelling projected that the new interconnector would place downward pressure on the wholesale spot price of electricity in South Australia and New South Wales. The projected impact on retail bills largely followed the impact on the wholesale spot price:
— residential and small business customers in South Australia would experience a reduction in their electricity bills with the new interconnector, with the reduction varying each year
— in nominal terms, over the first three years to 2026, the modelling projected annual residential customer bills would reduce by up to about $30 in South Australia and $20 in New South Wales for a representative customer.
The electricity sector is fast moving, so by the time ElectraNet was ready to make its contingent project application, our 2018 modelling was out of date. Our modelling was updated in September 2020.
The updated modelling projected that the representative South Australian household would save about $100 per year due to reduced wholesale electricity costs when Project EnergyConnect is complete. Small and large businesses are expected to enjoy savings too.