Draft Network Infrastructure Strategy for NSW

To shape the NIS, EnergyCo sought feedback on the following questions relevant to our stakeholders. The consultation period closed on Friday 4 November 2022.

1. In what ways can the NIS further complement, align or improve the National Transmission Planning and Investment framework under the National Electricity Rules?
2. Do you agree that the NIS should in future accompany the IIO Report?
3. What additional emerging trends that could influence the development of NSW's electricity system, beyond the three outlined, should be considered in the NIS?
4. Has the NIS appropriately assessed the impact of a potential domestic and export hydrogen economy on transmission infrastructure? If not, what additional factors should EnergyCo consider?
5. What is the most effective way for EnergyCo to support the delivery of renewable energy capacity for hydrogen export projects by 2030 and 2040? For example, should we expand existing REZs or develop new dedicated REZs?
6. What is the hydrogen export potential that future NIS should aim to facilitate through its network developments by 2030, 2040 and 2050?
7. How and at what point should generation from OSW be considered in network planning for the future editions of the NIS? What other considerations are important when it comes to OSW?
8. How can EnergyCo best work with industry to incorporate long-duration storage projects into transmission planning for REZs in NSW?
9. Has EnergyCo identified the right principles to guide the development of the Network Infrastructure Options? How could they be improved?
10. What are stakeholder views on taking an 'option-rich' approach to manage the inherent uncertainty in the future evolution of the energy system? Are there better approaches to manage this uncertainty?
11. Do stakeholders agree that the development of network options should be designed at sufficient scale to avoid multiple projects being built in the same locality over time?
12. Is the process for estimating cost and delivery schedule for these potential augmentations considering enough factors to be robust enough for a high-level comparison of options? If not, how could it be improved?
13. Are the scenarios used to test the benefits of the augmentations adequate? If not, how could they improved?
14. Is the methodology to estimate the projects commissionable by 2025 and 2027 adequate? If not, how could it be improved? How could EnergyCo estimate the generation projects that may be connected to the existing shared NSW network post 2027?
15. What are stakeholder views on the processes used to develop the REZ network options? How could the option development process be improved to reduce electricity prices for NSW consumers, support reliability and security, and maximise benefits for regional communities?
16. What factors additional to consumer price impacts, community feedback, land-use planning, workforce availability and supply chain considerations, should the NIS consider in designing, developing, and delivering REZ transmission network options?

How will EnergyCo consult on the Draft Network Infrastructure Strategy?

EnergyCo published the Draft Network Infrastructure Strategy on Friday 30 September 2022. Consultation questions were included in the document and submissions closed on Friday 4 November 2022.

Further engagement with communities in each REZ is being run by EnergyCo as the Infrastructure Planner at the time of project development. This will give communities further opportunity to engage and provide feedback around the development of each of the NSW REZs.

What are the opportunities for engagement throughout the development of a REZ?

There are a range opportunities to get involved in the development of REZ.

Each REZ will go through a formal exhibition process as part of the draft declaration. The NIS is intended to be an early engagement platform for the future REZ works throughout NSW.

The REZ declaration process is the next step in which public feedback is sought on the possible REZ geographical boundary and the proposed network infrastructure.

The REZ Access Scheme declaration for each REZ will also provide an opportunity for public feedback on the proposed access scheme to be applied to a particular REZ.

Each REZ will have specific ongoing engagement with the relevant stakeholders during the detailed design and delivery phases of each project.

We value your feedback at all stages of development to ensure that the best outcomes for NSW are achieved.

For the latest news from EnergyCo on REZ developments and opportunities for engagement, we encourage that you sign up to our mailing list here.

How will feedback be taken on board?

EnergyCo’s goal is to ensure that the community’s views are integrated into its infrastructure strategy, alongside technical and economic factors, from early stages of project development. This is in the context of a need to transform the electricity system.

The Draft NIS has been published to give stakeholders, from communities and consumer to industry and workers, an early view on the scope of strategic network development required across the State to ensure affordable, clean and reliable electricity - and encourage engagement on the future of NSW’s energy system.

This is a critical period and the NSW Government is working to modernise our electricity network and ensure a secure and reliable supply of power to the entire state.

We encourage all stakeholder to engage with us. Please contact [email protected] or call 1800 118 894 if you have any questions or comments.

How is the theoretical maximum transfer capacity determined? How is this different from declared capacity?

This represents our current view on the likely most amount of power from a REZ if all identified generation, at the time of option development, were to be connected, as well as all required downstream augmentations completed.

This maximum transfer capacity is determined through staged expansions of REZ network infrastructure to accommodate future renewable generation.

It accounts for the generator interest identified in each REZ’s Registration of Interest, from which we have identified potential hub locations and connection arrangements based on generator proximity.

The declared capacity of a REZ is EnergyCo’s initial view on how much power can initially be delivered from the REZ based on our current understanding of feasible generator interest, constraints within the broader grid and any legislated targets.

It is important to note that the REZ declared transfer capacity within each REZ can be increased over time; the NIS has provided options to achieve the theoretical maximum transfer capacity, which may involve an increase in the REZ declared capacity

What is the current and ongoing cost of the NIS?

In the Draft NIS, EnergyCo is consulting on a new standard methodology for estimating the cost and delivery schedule of transmission projects.

Based on this methodology, EnergyCo will publish the costs for the Network Infrastructure Options as part of the Final NIS, alongside the benefits for NSW electricity consumers.

Planning questions

How will these options be assessed?

The Draft NIS outlines the process for the development of infrastructure options across the REZs and consider the scenarios which these options will be tested against. These scenarios represent different views on how the transmission network in NSW could evolve over time and are selected to ensures robustness in the planning and reliability in the system.

The NIS is considering three scenarios: Central, Early Coal Exit and Transmission Delay. This is to ensure resilience under future system scenarios.

• Central Scenario will provide a view on the benefits of the REZ under the current development trajectory.
• Early Coal Exit will provide a view of the additional benefits of REZs with earlier than anticipated coal closures.
• Transmission delay will provide a view will provide insight into an alternative plan if such delays eventuate. This assumes all transmission projects above $1bn in capital cost are delayed, reflecting uncertainty around supply chains.

The current engagement around the Draft NIS is critical to inform on these options and help EnergyCo assure all stakeholders that the development pathway of each REZ occurs in the economic interests of New South Wales energy consumers.

The options are not ranked or ordered by preference - they are determined according to economic assessment only.

How will joint planning occur between EnergyCo, the Consumer Trustee and AEMO's ISP?

Through collaboration with the Australian Energy Market Operator (AEMO), Transgrid and the NSW distribution businesses, the NIS and the IIO Report will together build on, and maintain consistency with, the AEMO’s Integrated System Plan (ISP) and Transgrid’s Transmission Annual Planning Report (TAPR).

The Consumer Trustee's Infrastructure Investment Objectives Report, which is informed by the NIS, adopts the NEM-wider perspective of AEMO's ISP and serves as an input regarding REZs and supporting downstream augmentations into the TAPR.

Will the options and downstream augmentations identified in the NIS feed back into the ISP?

AEMO may choose to include Network Infrastructure Options identified in the Final NIS into subsequent ISPs. EnergyCo and AEMO will collaborate closely on strategic transmission development under the ISP and the NIS.

How can developers work with EnergyCo and the Consumer Trustee to develop the network augmentations identified to allow more generation in the REZs?

EnergyCo will engage with interested major generation and storage developers in each REZ as it develops REZ network infrastructure projects.

The recently launched community survey which formed part of the Listen program closed on Sunday 16 October 2022 and captured a spectrum of views across communities.

We encourage future engagement which demonstrates social licence throughout the process.

What are the general locations for each potential hub (i.e. substations) in each REZ?

We cannot advise on the location of hubs in every REZ at this stage given development remains underway for some REZs.

Central-West Orana REZ is more progressed than other REZs and a general understanding of possible areas of interest for hubs is known - however these are yet to be finalised.

For South West REZ, Project EnergyConnect influences the potential areas where hubs could be located.

For New England, Hunter-Central Coast and Illawarra REZs, more detailed development of REZ network infrastructure options is required before more can be shared on possible hub locations.

It should be noted that the NIS provides stylised maps which note localities and geographical areas within each REZ, but not specific locations of any REZ network infrastructure.

For each REZ, we intend to engage early with generators to inform the design of network infrastructure - and therefore encourage these parties to reach out and engage throughout the NIS process to help inform the network design.

How are existing ISP actionable projects considered through the options? How is VNI West considered in the South West REZ?

The Consumer Trustee will undertake a modelling exercise for the Final NIS to prepare a development pathway over a 20-year period for generation and long-duration storage infrastructure to meet legislated infrastructure investment objectives.

As part of this exercise, the Consumer Trustee will concurrently develop an optimised sequence and timing for network infrastructure by selecting from the Network Infrastructure Options. This exercise will consider the existing ISP actionable projects across the National Electricity Market.