The Federal Government has announced a deal with the NSW Government to finance expansion of the NSW energy grid. The Commonwealth will invest $4.7 billion to add to the state’s existing $3.1 billion commitment to support implementation of the NSW Electricity Infrastructure Roadmap.
The federal funds will help finance infrastructure connecting New South Wales’ Renewable Energy Zones (REZs) and the Federal government’s Snowy 2.0 scheme into the grid.
The Public Interest Advocacy Centre welcomes the plan’s support for investment in Renewable Energy Zones to encourage faster transition of the NSW energy system. However, the deal doesn’t address the bigger issue of who ultimately pays for the transmission needs of major generation and storage projects like Snowy 2.
Under the deal, NSW household electricity bills will still be hit with billions of dollars of extra costs over decades to come, to cover Snowy 2’s transmission costs.
Craig Memery, Senior Energy Advisor at the Public Interest Advocacy Centre says:
‘Snowy 2.0’s market disruption and unrealistic project timelines are already costing consumers hundreds of millions of dollars in higher wholesale costs. Unless Snowy Hydro carries the full cost of its own transmission needs, NSW households will be charged billions more to cover its expensive and inefficient infrastructure.’
‘With Snowy 2.0, the Albanese Government has inherited a bad deal for consumers. They might not be able to walk away from the project, but as the owner of Snowy Hydro they can prevent NSW energy consumers from being burdened with Snowy 2’s multi-billion dollar transmission cost.’
‘While we welcome this much-needed government investment in modernising our electricity system with Renewable Energy Zones, the announced funding doesn’t address the extra grid costs consumers face to subsidise the Snowy 2 project.’
‘People are already facing huge increases to energy bills they can’t control and they need a fairer deal. Generation and storage projects like Snowy get the primary benefits from these big network extensions and they should be paying their fair share of the cost.’
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