Consumers in NSW face the biggest bill shock from the nation’s delays in transmission infrastructure to support renewable energy, independent modelling shows.

Households and businesses face higher electricity bills unless federal and state governments get investment back on track, Nexa Advisory chief executive Stephanie Bashir warned on Monday.

The latest research found the delays in building energy transmission infrastructure – which average three years – could also compromise energy reliability and put emissions reduction targets in jeopardy.

The cost ramifications were most significant in NSW with residential consumers facing up to $1100 in additional annual costs if transmission delays continue at this pace, or even more if political squabbles and greater investor caution add to delays.

Small businesses in NSW with 40 megawatt hour electricity consumption could face a 23 per cent bump in costs – up to $7716 a year – which increases to $24,124 with a seven-year delay, the report warned.

Endgame Economics was commissioned to add up the costs of transmission delays on wholesale market prices, consumer energy bills and reliability outcomes across NSW, Queensland, South Australia and Victoria.

Consumers pay more when there are delays because network upgrades would have improved congestion and curtailment, enabling greater use of cheaper, renewable energy generation.

Researchers also confirmed transmission delays could cause broader knock-on inflationary damage across the economy.

“This research is about the here and now and getting the transition away from coal done in as orderly way as possible, so that it does not cost Australian families and businesses their financial future,” Ms Bashir said.

The impacts of transmission delays on small businesses have been largely overlooked by targeted government support, yet they employ 42 per cent of the workforce and contribute almost a third of GDP, the report found.

The impact is most severe in NSW, where intra-regional transmission projects such as HumeLink play a critical role in transporting electricity generation from various regions to the major population centre of Sydney, Newcastle, and Wollongong.

Timely new transmission would also reduce a dependence on higher-cost gas generation to keep the lights on during times of peak demand.

But Queensland was expected to suffer the least from delays because more than 93 per cent of the state’s coal-fired generation capacity is not due to close until after 2035, and more than a third (38 per cent) will still be operating after 2040.

Incentives to get projects delivered on time and on budget are urged for the Capacity Investment Scheme, which aims to add half the current National Electricity Market capacity to the national grid by 2030, as well as firmer bilateral agreements.

South Australia was the first to sign a Renewable Energy Target Agreement, which replaces the coalition’s non-binding arrangements, pledging this month to have enough new infrastructure to power every home in Adelaide in return for dedicated federal funding.

The research also calls for a better job to be done in working with communities to build support for the changes.

 

Marion Rae
(Australian Associated Press)