Reinforcing the NSW Southern Shared Network HumeLink RIT-T PADR NPV - - PowerPoint PPT Presentation

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Reinforcing the NSW Southern Shared Network

HumeLink RIT-T PADR NPV results

Ann Whitfield, Partner February 2020

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Options 2C and 3C provide the greatest net benefit in all scenarios

2

SUMMARY OF THE ESTIMATED NET MARKET BENEFITS Central Step change Slow change Fast change

• 200

200 400 600 800 1,000 1,200 1,400 1,600 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4 $m, PV

• 200

200 400 600 800 1,000 1,200 1,400 1,600 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4 $m, PV

• 200

200 400 600 800 1,000 1,200 1,400 1,600 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4 $m, PV

• 200

200 400 600 800 1,000 1,200 1,400 1,600 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4 $m, PV

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Avoided fuel costs and generation/storage costs are the greatest source of market benefits

3

BREAKDOWN OF NET MARKET BENEFITS Central Step change Slow change Fast change

• 2,500
• 1,500
• 500

500 1,500 2,500 3,500 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4

$m, PV

Transmission capex Transmission opex Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs) NPV

• 2,500
• 1,500
• 500

500 1,500 2,500 3,500 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4

$m, PV

Transmission capex Transmission opex Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs) NPV

• 2,500
• 1,500
• 500

500 1,500 2,500 3,500 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4

$m, PV

Transmission capex Transmission opex Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs) NPV

• 2,500
• 1,500
• 500

500 1,500 2,500 3,500 Option 1A Option 1B Option 1C Option 2A Option 2B Option 2C Option 3A Option 3B Option 3C Option 4A Option 4B Option 4C Route 1 Route 2 Route 3 Route 4

$m, PV

Transmission capex Transmission opex Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs) NPV

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Early benefits are driven by thermal plant retirements while fuel saving benefits occur later

4

CUMULATIVE GROSS MARKET BENEFITS OVER TIME FOR OPTION 3C Neutral Step change Slow change Fast change

• 500

500 1,000 1,500 2,000 2,500 3,000

$m, PV

Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs)

• 500

500 1,000 1,500 2,000 2,500 3,000

$m, PV

Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs)

• 500

500 1,000 1,500 2,000 2,500 3,000

$m, PV

Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs)

• 500

500 1,000 1,500 2,000 2,500 3,000

$m, PV

Avoided unserved energy Avoided REZ transmission capex Avoided fuel costs Avoided voluntary load curtailment Avoided generation/storage costs (excl. fuel costs)

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Sensitivity testing of Option 3C confirms robustness

5

Only early coal plant retirement Snowy 2.0 doesn’t proceed Higher DER uptake Development of QNI stage 2 in 2028/29

Sensitivity tests undertaken for the PADR

Development of VNI West in 2034/35 Staged development of Option 3C (central, fast, step) 50 per cent POE demand forecasts Low discount rates Low capital costs Higher NPV Lower but positive NPV Lower and negative NPV Life extensions and early coal plant retirement Insensitive Snowy 2.0 doesn’t proceed + slow Staged development of Option 3C (slow) High capital costs High discount rates

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