By Agnes King
Unconventional methods are reaping big cost savings in electricity grid overhauls for transmission businesses, whilst investor confidence, supply chain security, and community support are the top priorities for network planners in Victoria.
In the lead up to Australian Energy Week we interviewed some of the expert speakers on the latest developments in grid planning and investment. We spoke to:
- Marie Jordan, Executive General Manager, Network Planning, Transgrid
- Jacqui Bridge, Executive General Manager, Energy Futures, Powerlink Queensland
- Alistair Parker, Chief Executive Officer, VicGrid
- Bobby Vidakovic, Head of Grid, Clean Energy Finance Corporation
Unconventional methods are reaping big cost savings in electricity grid overhauls
In early March, Transgrid ran an online seminar to investigate unconventional solutions to the engineering challenge of maintaining system strength in the national electricity grid as coal-fired power stations are turned off and replaced with renewables.
186 people joined the call. 90 minutes later, there were still 177 people thrashing out new ways to stabilise the system.
“There are so many ways to solve these problems,” Transgrid’s Executive General Manager of Networks, Marie Jordan, says.
“We need to make sure we’re innovative and don’t just pull the same tool out of our kit that we’ve always used.”
An energy network veteran from the United States, Ms Jordan says that after a year in Australia, she is still amazed at the engineering talent and innovation that exists here.
She wants to put it to work to save millions of dollars for customers in the construction of 10,000km of new transmission lines needed to support 120GW of large-scale renewable energy and storage on the national energy network.
Jumping the queue
Transgrid expects to find $500 million worth of savings on its three largest projects – EnergyConnect, HumeLink and VNI West – using a new procurement approach spearheaded by Ms Jordan.
“At this scale, we have to do things differently,” she says.
Transgrid’s new programmatic procurement approach will also accelerate delivery using standardised engineering and materials, long term contracts with vendors, bulk buying, and greater flexibility to shift workers between projects to limit downtime.
It is expected to bring forward the completion of VNI West to 2028.
Conventional models are insufficient to gain supremacy in critical global supply chains, warns Jordan. Too many countries are undertaking massive energy infrastructure builds simultaneously, motivated by deep-seated concerns about energy security.
“We’re not the only one’s doing this, so we have to ensure that equipment manufacturers not only have the product lines developed that we need, but also that they have capability to add more,” Ms Jordan says.
To drive home the point, Ms Jordan rattles off a list of key components and materials necessary for Transgrid’s three major projects: 20 large scale transformers, enough transmission line conductor to stretch from Sydney to Los Angeles, as well as sufficient steel to build the Sydney Harbour Bridge and have 5,000 tonnes left over.
At one point, Transgrid had consulting house McKinsey investigate the commercial feasibility of establishing a green steel facility as an auxiliary division.
“We’re still entertaining that,”Ms Jordan says.
Cross sector coordination
Coordinating the construction of energy networks, renewable generation assets, and storage is one thing. But the energy transition requires a step change in a whole range of different areas, including ports, roads, worker accommodation, and skills and training, says Powerlink Queensland’s executive general manager for energy futures, Jacqui Bridge.
‘There is a broad range of things that need to shift. The coordination and timing of that broader bundle is one of the challenges that we’re acutely aware of,” Ms Bridge says.
Ms Bridge feels Queensland might have an advantage over other states in coordinating these activities because the government retains an ownership stake in the critical entities.
“If you don’t own all of the components it’s very hard to have a coordinated plan for the system,” Ms Bridge says.
She points to the Queensland Energy and Jobs Plan (QEJP), published last year, as a great starting point for considering the energy transition, regional development, secure jobs and communities, in tandem.
Other states are grappling with coordination in their own way, Victoria through the establishment of VicGrid, and New South Wales by potentially expanding the remit of EnergyCo.
Regardless of how they do it, Bridge says it is important to approach it as system, not just an electricity network.
“We will get different types of generation but also different types of loads,” Ms Bridge says.
Queensland plans to increase the visibility of the five gigawatts of rooftop solar (it has 8GW of coal-fired power generation) currently in its network to better manage supply and demand.
Powerlink is ramping up its modelling, as well as its network monitoring technologies, to support this effort.
Central to this is looking at how to shape future loads to take advantage of plentiful generation in the middle of the day.
Storage will move energy to a different time when consumers want to use it. At the same time, Bridge wants to look at ways to incentivise consumers to move their energy usage to when it’s most readily available.
“How we get people thinking about that and plan a system, rather than a network, or generation assets, will be a key shift in the way that we do things,” she says.
Open access regime has investors gun shy
VicGrid Chief Executive Officer, Alistair Parker, says fixing the nation’s open access regime to give developers certainty over investment decisions must remain a top priority for network planners.
“The sweet spot will be getting it to a point that developers can get the certainty they need, at a price that they can afford, at the point in the lifecycle of a project that works,” Mr Parker says.
Right now, he says, some “terrific ideas” look unaffordable to developers.
Meanwhile, the Clean Energy Finance Corporation (CEFC) is flexing its muscle as a specialist investor, working to address financing and cost-gap challenges through the development of tailored financing solutions, concessional finance, and bespoke structured instruments.
“For 2022–23 and beyond, we are actively looking to investments in actionable transmission projects under the Australian Energy Market Operator’s integrated system plan, supported by contestable Renewable Energy Zone projects to provide the necessary infrastructure to enable 82 per cent renewables by 2030,” CEFC Head of Grid, Bobby Vidakovic, says.
So far, the CEFC has invested over $580 million in grid infrastructure across three key projects. EnergyConnect remains its single largest investment to date, alongside a stake in the Southern Downs Renewable Energy Zone and Snowy 2.0.
Procurement is challenged
Supply chain security is the other pressing issue for network planners in the reconstruction of the national energy market, according to Mr Parker.
“Five years ago, it was all about getting the best price. Today, it’s about who exactly is going to supply it and your position in the factory queue,” Mr Parker says.
For governments this includes initiatives to attract experienced international players to support the emergence of local industry.
Established in 2021 to manage the development of the Victoria’s six renewable energy zones, VicGrid oversees related investments to beef up the grid, and work with local communities and traditional owners to ensure they benefit.
Parker remains optimistic about the energy sector’s ability to convince local communities to embrace large scale renewable infrastructure projects.
This is one aspect of the energy transition that absolutely cannot be fumbled.
“We’ve got to get this right,” Mr Parker says.
There are plenty of lessons that the energy sector can adopt from mining and transport about how to garner community support and acceptance for large scale infrastructure projects, he says.
“We do big projects that intrude in people’s lives all the time. We are experienced as a society in doing it in ways that balance people’s interests,” Mr Parker says.
However, there are niggling concerns in some quarters that the energy sector hasn’t done these types of big developments for 30 or 40 years.
Public sentiment was very different back then, and the assets were entirely government owned.
Having answers to questions when the community needs them is key, says Mr Parker.
“We must get out and tell the community how urgent this is, that it will create huge investment and huge opportunities.
“While it will impact particular communities, we’re going to set up a benefit sharing regime so the ultimate design of these assets, and where they are located, is done in a way that minimises their impact as much as possible.”
Hear from Marie Jordan, Jacqui Bridge, Alistair Parker, Bobby Vidakovic and a host of energy leaders in the Re-engineering the Grid stream at Australian Energy Week.
To hear from the speakers in the ‘Future Retail’ stream at Australia Energy Week, register for your ticket here: https://www.energyweek.com.au/registration
Energy Magazine is a Media Partner of the Australian Energy Week Conference.
