<
https://reneweconomy.com.au/transgrids-latest-cost-blowout-raises-a-key-question-what-was-the-point-of-privatising-energy-networks/>
"It has recently hit the news that New South Wales transmission company
Transgrid is seeking to pass-onto consumers $1.1 billion of a $1.5 billion blow
out in the construction costs of Project EnergyConnect.
It’s important to put this blow-out in context, because it is by no means a
small blow-out. Originally when Transgrid persuaded the Australian Energy
Regulator to approve this project as good for consumers, it was projected that
its share of the project cost would be $1.82 billion.
So under Transgrid’s watch this project’s cost has blown out by 82%. It’s also
not small relative to the size of Transgrid’s overall asset base, which was
$7.65 billion in 2021-22.
One would expect that one of Transgrid’s core capabilities that consumers pay
them for is the management of construction risks associated with building
transmission lines. But according to Transgrid’s shareholders they shouldn’t
have to bear even a third of this risk.
Yet this is just the tip of the iceberg for a far bigger issue: if the
shareholders in network monopolies aren’t prepared to wear the core and highly
obvious risks associated with their business, why did we privatise these things
in the first place?
This extends well beyond Project EnergyConnect to issues related to whether
electricity and gas network shareholders should be immune from any loss in
revenue associated with declining consumer demand for network capacity due to
electrification (for gas networks) or energy efficiency, solar and batteries
(for electricity networks)."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
