On 1 March 2024, The Australian Energy Regulator (AER) published the Contingent Project Application Stage 2 (CPA2) for Transgrid’s HumeLink project, which outlines the estimated project costs and anticipated community benefits.

Publication of the CPA2 started AER’s official four-week consultation process for this part of the process. It ran in parallel with the consultation period for Transgrid’s Response to the Material Change in Circumstance (MCC) assessment, which demonstrates that the project remains the preferred option.

The feedback period for the MCC assessment was extended at the request of the community, to align with the consultation process for the CPA2.

Submissions on the CPA2 were invited by the AER between 1 March and 3 April 2024. Transgrid welcomed feedback on the MCC until 3 April 2024.

More information on the CPA2 can be accessed on the AER’s website: www.aer.gov.au/news/articles/communications/consultation-open-humelink-stage-2-contingent-project-application

Further updates will be provided as planning progresses.

On 1 March 2024, Transgrid published an update regarding the Material Change in Circumstance Assessment (MCC). Under the National Electricity Rules (NER) a material change in circumstance assessment (MCC) is required if a project changes in terms of cost. As part of this announcement, Transgrid invited feedback from communities and stakeholders by midnight 21 March 2024. This consultation period has been extended until 3 April 2024 at the request of community.

The MCC tests if these project changes impact the ranking of the preferred option compared to the original assumptions made in the Regulatory Investment Test for Transmission (RIT-T) process, which was completed for HumeLink in 2021.

The overall cost of HumeLink has increased from $3.27b in 2021 to $4.88b in 2024. These cost increases are driven by global demand, supply chain disruption and increased prices for raw materials and are commensurate with increases in major projects globally during this period. During this period, the market benefits also increased and as such the assessment found the preferred option for HumeLink remained unchanged. This means the increase in cost is not deemed a material change in circumstance event as defined by the attached report.

The market benefits associated with HumeLink have increased, from $500m to more than $1b. This significant increase in market benefits is primarily driven by:

• the latest AEMO information on timing of energy generation projects, and 
• emissions targets and renewable energy policies changing the inputs and assessments for AEMO benefits modelling.

The reports below and associated models outline this information in more detail. Transgrid welcomes feedback from communities and stakeholders. If you would like to give feedback, please email humelink@transgrid.com.au by midnight 3 April 2024. Feedback received during the period will be considered by the HumeLink project team and responded to after the closing date.

The extension of the MCC feedback period aligns with the Australian Energy Regulator (AER) consultation on the Contingent Project Application Stage 2 (CPA2) for HumeLink.

A draft Contingent Project Application (draft Application) has been published for the delivery of Humelink, which will be our largest capital project since construction of our existing network. It involves around 360km of new 500 kV transmission lines connecting the greater Sydney load centre with the Snowy Mountains Hydroelectric Scheme and Project EnergyConnect.

A Contingent Project Application (CPA) is the application a regulated business like Transgrid makes to the Australian Energy Regulator (AER) to amend its revenue determination to include cost recovery from consumers for a project such as HumeLink. 

The AER provided its determinations for Humelink Stage 1 part 1 (Early Works) on 17 Aug 2022 and Stage 1 part 2 (Long Lead Equipment) on 25 Aug 2023. We are please to now provide our draft Stage 2 Contingent Project Application for the delivery of the HumeLink project.

Stakeholder engagement on our draft Stage 2 Application is important due to the significant costs involved. Please refer to the following documents for further details:

• Humelink Draft CPA-2 – Principal Application – This document sets out our proposed expenditure, the associated incremental revenue requirement and the indicative customer bill impacts for Stage 2 activities.
• Humelink Draft CPA-2 Direct Capex Forecast Method – This document explains and justifies our Stage 2 direct capex forecast.
• Humelink Draft CPA-2 Labour & Indirect Capex Forecast Method – This document explains the bottom up forecast of labour and indirect support costs required for the design, construction and management of the program.

Please share with us your views and position on this draft Stage 2 Application by email at: regulatory.consultation@transgrid.com.au by 22 December 2023.

Stakeholders and community members can provide feedback on the draft HumeLink CPA Stage 2 application should they wish to do so before the statutory period begins. However, there will be another opportunity to give feedback on this application.

Following this initial feedback round and the following feedback loop confirmation from AEMO, Transgrid will submit our formal HumeLink CPA Stage 2 application to the Australian Energy Regulator (AER).

A formal consultation process will follow in 2024, including public exhibition of the application for a statutory period of four weeks.

Transgrid has announced the three proponents shortlisted to submit tenders to deliver a critical link in the National Electricity Market - the HumeLink transmission project.

Following an expression of interest in August 2022, Transgrid has invited three reputable Tier 1 Delivery Partners with strong experience in delivering infrastructure projects in Regional NSW to bid for the project’s delivery contracts.

• Acciona Construction Australia Pty Ltd, Kalpataru Power Transmission Limited and Genus Plus Group Ltd (JV);
• Downer Utilities Australia Pty Ltd and Consolidated Power Projects Australia Pty Ltd (JV); and
• UGL Engineering Pty Ltd.

The successful proponents, who have also demonstrated experience in supporting sustainability, local jobs and First Nation participation, will now proceed to the next phase of the selection process: Read Transgrid’s media statement.

Transgrid has welcomed the Australian Energy Regulator’s (AER) approval of the requested funding for Stage 1 (Part 2) of the HumeLink Project. 

This latest round of funding is a further indication of the Regulator’s confidence in this critically important transmission project, which represents a significant investment in Australia’s energy capability. 

The proposed HumeLink 500 kilovolt (kV) transmission lines are critical to the release of more affordable, reliable and renewable energy to the grid and is a priority project for the Australian Energy Market Operator (AEMO) and the Commonwealth and NSW Governments. 

The $227.9 million in capital expenditure enables Transgrid to procure critical items which are subject to long lead delivery times - such as transformers, reactors, conductor and steel towers. 

Stage 1 (Part 2) funding reduces cost uncertainty, by mitigating against current inflation and securing supply chain availability by bringing the associated costs forward and reducing the stage 2 cost by an equivalent amount. 

The Australian Energy Regulator’s determination follows their approval of the stage 1 (early works) funding on 17 August 2022 for $383.3 million ($2022-23). 

Transgrid has welcomed the Australian Energy Regulator’s (AER) approval of all of the requested funding for Stage 1 (early works) of the HumeLink Project.

The $321.87 million in capital expenditure represents the next step in bringing more affordable, reliable, renewable energy to the grid as Transgrid delivers a next-generation transmission capability for NSW and the National Electricity Market.

This funding agreement is an indicator of the confidence the Regulator has in the HumeLink Project, which will reinforce the backbone of the transmission network for the eastern seaboard and unlock the full capacity of the Snowy Hydro 2.0 project

The funding will be used to conduct early works to reduce project risks and ensure Transgrid maximises efficiencies to help drive down energy costs to the consumer. Transgrid will continue to consult and collaborate with First Nations groups, communities and landowners on HumeLink to refine the project scope and identify investments which can return meaningful benefits to the families and communities living and working near the major project. These include training and employment opportunities, housing initiatives and funding community projects. Transgrid has issued an Expression of Interest for key delivery partners to design, install and commission the infrastructure.

HumeLink is a new 500kV transmission line which will connect Wagga Wagga, Bannaby and Maragle in southern NSW.

Read Transgrid’s media statement on Australian Energy Regulator’s (AER) approval.

In late 2021, Transgrid was asked by the community and landowners to investigate options which explore the feasibility of building the HumeLink project via underground cable instead of overhead transmission lines.

Transgrid agreed to form a collaborative, Steering Committee, which developed an underground feasibility study scope of works. GHD and sub-consultants Stantec were appointed due to their High-Voltage Direct-Current (HVDC) expertise.

Following the completion of additional independent reviews of the project costing assumptions, GHD and Stantec have finalised the HumeLink Project – Underground Report and the community members of the Steering Committee have provided Transgrid with their response to the Report. In February 2023 Transgrid released its response to the report.

The cost of undergrounding the HumeLink transmission lines is estimated to be $ 11.5 billion at least three times more than the entire project’s current cost of $3.3 billion.

This is unsustainable as the additional cost will be passed on to commercial, industrial and private electricity consumers, at a time of great concern about escalating electricity prices.

The additional expenditure would curtail expenditure on other transmission projects essential for connecting alternative, renewable energy to consumers. This is because there is only a finite amount of money available to rewire the nation to deliver alternative, renewable power.

Undergrounding transmission lines would mean a significant delay in completion of the project by up to five years.

This delay would threaten the timely connection of the new renewable energy and the related essential new interstate connections to the grid. It is essential that the infrastructure is completed by 2026 to secure the network before the ageing power stations are decommissioned. A significant delay would put the energy security and stability of large parts of Eastern Australia at risk of failure.

We understand and empathise with the concerns of landowners and their desire to avoid hosting transmission infrastructure on their land.  We appreciate that people will be disappointed by the decisions following the completion of the report. However, it is very difficult to put in place any large infrastructure project without impacting some landowners. We hope that certainty may, to some extent, balance concern and disappointment.

Transgrid will continue to consult with landowners to minimise the impact to their properties.

Transgrid would like to acknowledge the efforts of the communities and volunteers from across the HumeLink footprint for the many hours they have contributed to the work of the steering committee since late 2021.

In March 2022, Transgrid completed route refinement decisions in most areas on the above-ground study for the 200m corridor for the HumeLink project in the four key areas of Tumut, Bannaby, Pejar Dam and Green Hills. To minimise impact the preferred route was based on:

• keeping the transmission line as straight as possible;
• selecting the shortest possible route between two substations; and,
• where possible be parallel to existing transmission easements and use public land

Transgrid’s constraints mapping process also considers factors including social considerations, environmental considerations, land use considerations, network resilience and cost.

To learn more about our route refinement decisions for the Tumut, Banaby, Green Hills and Pejar Dam areas, please see our fact sheets in our resources section.

In March 2022 Transgrid engaged an engineering consultant, GHD Pty Ltd, to conduct a comparison of transmission line route options for the HumeLink project in the Tumut area in response to landowners requesting that ‘Option 2F’ through the Kosciuszko National Park be thoroughly investigated as a viable option. Based on their assessment, the GHD report identifies Tumut North as the recommended option because it would impact the smallest number of landowners, represents the lowest project cost and would have the least impact on the environment. The GHD Options Assessment Report and HumeLink fact sheet explaining our route refinement decision can also be found in our resources section below.

In April 2022, based on Transgrid’s study results and GHD’s recommendation, the preferred 200m corridor was announced.