Electricity bills in New South Wales could increase by $1,100 per year due to delays in transmission infrastructure upgrades, according to a new report.
Transmission infrastructure includes high-voltage cables, towers, and transformers that move electricity from coal or wind towers to homes and businesses.
Australia’s energy transition will need updates to this transmission network to accommodate new capacity from renewable energy.
Research from Nexa Advisory said the cost of delays could impact electricity costs.
“Our report reveals that delays in building energy transmission infrastructure will lead to higher electricity bills for households and businesses, compromise energy reliability and jeopardise emissions reduction targets,” the advisory said.
“Nexa Advisory’s research shows the cost impacts of the delays are most significant in New South Wales. Residential consumers could face up to $1,100 in additional costs if transmission project delays continue at the average of three years observed in recent years.”
The report found that small businesses could pay thousands more, which could also contribute to inflation.
“Small businesses in New South Wales could also pay up to $7,716 a year more. This increases to $24,124 with a seven-year delay,” the report said. “That means that transmission delays are also likely to have broader knock-on inflationary impacts across the economy.”
Speed Up Renewable Rollout or Rely on Coal: Nexa CEO
Nexa Advisory CEO Stephanie Bashir said the factors contributing to the “slow pace” of the energy transition are complex.“This research is about the here and now and getting the transition away from coal done as orderly as possible so that it does not cost Australian families and businesses their financial future.”
The report states that delayed transmission buildout will result in a greater dispatch of thermal coal assets to “meet demand,” that will supposedly contribute to wholesale prices and emissions across the National Electricity Market.
The report noted that Queensland would have a “muted impact” from transmission delays because it is less dependent on transmission interconnection than other states.
10,000 Kilometres of New Transmission Lines Needed: EY
Meanwhile, a separate research report from auditing giant, Ernst and Young (EY), estimated Australia needed 10,000 kilometres of new transmission lines by 2050 to achieve renewable energy targets.EY found three major obstacles to building the infrastructure: supply chain challenges, labour constraints, and the approvals process, including regulation and planning.
“However, in its most recent update to the Electricity Statement of Opportunities (ESOO), published in May 2024, AEMO noted significant delays to key transmission projects and called for urgent investments in transmission capacity.”
Renewable Energy Zone in Outback NSW
In June, the NSW government approved the Central-West Orana Renewable Energy Zone (REZ) transmission project.This paves the way for the construction of transmission infrastructure to connect solar, wind and energy storage projects to the electricity grid.
The government claims this will drive $20 billion in private investment in renewable projects while supporting 5,000 jobs.
About 240 kilometres of transmission lines and infrastructure will be constructed within the Central West Orana renewable energy zone, in the west of the state.
The federal Labor government is committed to net zero by 2050, and transitioning the energy grid to 82 percent renewables by 2030.
In contrast, if it wins the next election, the Liberal-National Coalition is planning to build seven nuclear power plants to support the push to net zero.