Electranet, the owner of the interconnector, as well as the Australian Energy Market Operator have proposed that upgrading the interconnector will deliver net economic benefits. These include: allowing greater competition in SA from lower cost Victorian generators; as well as enabling the export of a greater amount of wind power from SA, which tends to have access to higher wind speeds than Victoria and therefore lower costs.
For the upgrade to go ahead the Australian Energy Regulator needs to be convinced that the project will indeed deliver net economic benefits and is calling for further submissions until 7 February 2014.
Wind power project developers in SA are likely to welcome the upgrade because at present when the wind blows strongly prices can often become depressed. Also there is the potential in the future for further installations of wind farms to result in wind power output sometimes exceeding available demand. The interconnector upgrade will increase capacity for power exports into Victoria when demand is low in SA, reducing the likelihood of wind farms’ output being constrained-off.