New interconnectors could increase costs and reduce reliability if they are not part of a national energy and climate strategy, the energy industry said today.
The Australian Energy Council’s Chief Executive, Matthew Warren, said that the benefits of new interconnectors would need to be carefully assessed against potential risks.
“In the absence of a national climate and energy strategy, it is difficult to predict what conditions a new interconnector will be dealing with in 10 years, let alone by the end of its working life.
“These are 50 year assets that have material impacts on generation at both ends of the line. The risk is they increase costs without necessarily solving the system security problem they were meant to fix.
“The energy industry is not opposed to the increased use of interconnectors, and believes they can play an evolving role in a decarbonised Australian electricity grid of the 21st Century.
“But we have to consider them as part of a broader strategy to transform our electricity system, particularly given the relative cost is high because of our long distances and relatively small participating markets,” Mr Warren said.
“Without a national energy plan a new SA-NSW interconnector could increase carbon emissions as gas-fired generation in South Australia is replaced with higher emissions coal-fired generation. This could accelerate the closure of firm generation in SA, while pushing up energy costs for NSW consumers.“
About the Australian Energy Council
The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
Media contact Carl Kitchen 0401 691 342
The Australian Energy Council has welcomed the release of the Energy Security Board's options paper,which is the result of a substantial consultation process.
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