Scott Morrison’s $102 million plan to slash power costs
Earlier this week the Australian government unveiled a new $102 million plan that seeks to reduce energy prices and provide added protection from blackouts caused by an overloaded grid. At the heart of this new energy proposal are much-needed upgrades to the technology that connects the various power grids along the eastern coast of Australia. Prime Minister Scott Morrison announced the details of the proposal in a statement that was released by the government on Monday.
The financing for this $102 million strategy is set to be jointly provided by the NSW and federal governments, with each supplying half of the necessary funding. The project, labelled as the “Queensland-NSW Interconnector (QNI)”, is set for immediate commencement and will be coupled with upgrades to the Victoria-NSW Interconnector. Both of these east coast interconnectors were earmarked for urgent improvement works by the Australian Energy Market Operator (AEMO) back in 2018, due in part to the scheduled closure in 2023 of the Liddell coal-fired power station in Muswellbrook, NSW.
While the strategy put forth on Monday is still undergoing final cost-benefit analysis, the proposal allows for certain works on the QNI project to be expedited by TransGrid, the network service provider. Once completed, the improvements to the QNI grid system will increase the amount of power that can be transmitted from Queensland into New South Wales by approximately 190MW, and it’s hoped that this will, in turn, lead to lower energy pricing. “The QNI upgrade will facilitate greater competition between generators in the electricity market, helping to reduce wholesale prices,” stated Angus Taylor, Minister for Energy and Emissions Reduction. This was corroborated by the Prime Minister, who confirmed that “this is about putting downward pressure on wholesale prices to make sure businesses and households have access to reliable and affordable power.”
In addition to lowering electricity prices, the new energy strategy has been designed to improve network reliability, with New South Wales able to receive an additional 360MW of power during periods of high demand. Greater power stability is sure to be much appreciated by businesses that rely on constant energy supply to operate profitably. According to Taylor, “this is great news for the energy-intensive industries, and the jobs and regional economies that rely on them.”
The government has recently announced a string of investments that are aimed at lowering power costs across the country, in line with their pledge to drop the National Electricity Market (NEM) wholesale price by 25% before December 2021. These include 12 different projects (all due to be federally funded) which are aimed at boosting the country’s overall electricity supply. Based on information released by AEMO, the NEM wholesale price can account for as much as 40% of an average power bill for a residential property, so a 25% reduction could result in sizeable savings for Australian households.