The Clean Energy Finance Corporation (CEFC) has committed up to $1.92 billion for the construction of a clean energy “superhighway” in the government-owned organisation’s largest single investment since inception.
The superhighway, which comprises a range of major energy infrastructure projects in the sector, is aimed at connecting millions of consumers to renewable energy as Australia pushes toward net zero emissions by 2050.
The CEFC, supported by the $19 billion CEFC Rewiring the Nation Fund, is backing Transgrid’s delivery of two major energy infrastructure projects – the HumeLink and the NSW element of the Victoria-NSW Interconnector (VNI West).
Main construction work on HumeLink, which will link the Greater Sydney electricity load centre with the Snowy Mountains Hydroelectric Scheme, Energy Connect in south-west NSW and the NSW element of VNI West, is earmarked to start in early 2025.
The CEFC’s $1.92 billion investment is being sourced via a combination of concessional senior debt and subordinated notes which are designed to draw private-sector capital to the landmark project, as well as $140 million in CEFC debt finance previously provided to VNI West.
“HumeLink and VNI West (NSW) are vital parts of the clean energy solution,” says Ian Learmonth, the CEO of CEFC.
“These nationally significant projects will help bring low-cost and low-emissions clean energy to energy users in NSW and Victoria, with CEFC finance helping reduce the level of project costs that may be passed on to consumers.
“In making this very substantial investment commitment, we have drawn on the considerable scale and specialist expertise developed in our first decade of investment across the economy.”
Learmonth points out that the CEFC has previously used its capital to build investor confidence in developing large-scale solar and energy storage projects, and now the focus is turning to “the crucial area of 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,” he says.
“Renewable energy backed by storage delivers on all three elements, with a modernised transmission network the key to delivering this energy to consumers.”
Transgrid, which manages and operates the high voltage electricity transmission network in NSW and ACT, says its part in the “superhighway” concept also represents the largest single investment by its security holders who already have committed more than $2 billion to HumeLink and VNI West.
“We have a secure path forward for this critically important infrastructure, following all necessary approvals and the board’s decision to invest in this $4.895 billion project,” says Transgrid CEO Brett Redman.
“Transgrid and our delivery partners are excited to be delivering HumeLink to reinforce the southern NSW electricity grid and enable the integration of new renewable generation.
“Bringing this energy online will benefit millions of Australians on the eastern seaboard by providing consumers with access to cheaper renewable energy.
“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.”
The infrastructure is aimed at meeting the needs of future renewable generation capacity ahead of the progressive closure of Australia’s remaining coal-fired power stations which is forecast by the Australian Energy Market Operator (AEMO) to remove up to 90% of current coal-fired energy capacity by 2035 and all before 2040
