The Clean Energy Finance Corporation (CEFC) has committed up to $1.9 billion (USD 1.1 billion) to back New South Wales (NSW) and Australian Capital Territory (ACT) transmission operator Transgrid in delivery of two infrastructure projects: HumeLink and the NSW element of the Victoria-NSW Interconnector (VNI West).
Drawn from the Australian government’s Rewiring the Nation (RTN) Fund, the transmission investment is 10% of the RTN’s available $19 billion total.
The CEFC commitment of up to $1.92 billion is a combination of concessional senior debt and subordinated notes, designed to attract additional private sector capital to the landmark project and includes $140 million in CEFC debt finance previously provided to VNI West (NSW).
CEFC Chief Executive Officer Ian Learmonth said just as CEFC capital was used to build investor confidence in the growth of large-scale solar and energy storage sectors, it is now extending that focus to transmission.
“When we think about our energy system of the future it’s clear we want the most reliable, lowest cost and lowest emissions solution. Renewable energy backed by storage delivers on all three elements, with a modernised transmission network the key to delivering this energy to consumers,” Learmonth said.
“Importantly, our RTN Fund transactions are backing projects the Australian Energy Market Operator (AEMO) has identified as the most cost-effective solution to Australia’s clean energy transition and the achievement of our net zero ambitions.”
Transgrid CEO Brett Redman said the investment paves a secure path forward for the critically important infrastructure, following all necessary approvals and the Board’s decision to invest in this $4.8 billion project.
“Bringing this energy online will benefit millions of Australians on the eastern seaboard by providing consumers with access to cheaper renewable energy,” Redman said.
“HumeLink will also provide substantial opportunities for suppliers and jobs at both the regional and national level. It is expected to deliver more than $1 billion in net benefits for Australians.”
HumeLink will link the Greater Sydney electricity load centre with the Snowy Mountains Hydroelectric Scheme (Snowy 2.0), Energy Connect in south-west NSW and the NSW element of VNI West (NSW).
The infrastructure will deliver up to 2,000 MW of pumped storage to major population centres, with Transgrid modelling estimating the vast firming capacity will also enable the grid transmission of an additional 2,570 MW of renewable energy.
AEMO expects investment in transmission projects to be recouped while also saving consumers $18.5 billion in avoided costs and delivering emissions reductions valued at a further $3.3 billion.
