Landmark investment for Snowy 2.0 grid project
The Clean Energy Finance Corporation (CEFC) has committed $125 million to help finance the development of grid infrastructure critical to the delivery of the Snowy 2.0 pumped hydro project.
On behalf of the Australian Government, the funding marks the CEFC’s first major grid infrastructure investment, which will allow TransGrid Services to increase the amount of reliable and secure electricity to the National Energy Market (NEM).
The CEFC corporate debt facility with TransGrid Services is part of a complex project to connect Snowy 2.0 to the NEM. TransGrid Services will draw on CEFC finance to design, construct, operate and maintain a new 330 kV switching station and associated transmission lines as part of its agreement with Snowy Hydro Limited to provide connection services for 30 years.
Snowy 2.0 will offer economic stimulus, including the creation of about 4000 jobs during construction. It will also support new Renewable Energy Zones in southern NSW, including 1900 MW of renewables projects in construction or under development, by enhancing security and reliability of supply via Snowy 2.0.
CEFC CEO Ian Learmonth said, “Investment in new storage, transmission and related infrastructure is essential to support the security and reliability of the grid during Australia’s clean energy transition.
“Our ability to offer investment certainty in challenging market conditions is evidence of the critical role the CEFC can play in supporting grid-related developments. Snowy 2.0 offers large-scale energy storage and quick-start electricity generation during peak demand, providing critical security and reliability services to the NEM. We are delighted to be working with TransGrid Services in investing in this exciting project.”
On behalf of TransGrid Services, Richard Lowe said, “We are pleased to be part of this landmark investment with CEFC and delighted to support our longstanding customer Snowy Hydro in the development of the Snowy 2.0 project.
“Snowy 2.0 is an important project for Australia. It will be the largest generator connecting to the NSW grid for over 30 years, a critical component in supporting the energy system transition as well as securing low emission and low-cost energy for consumers.”
The AEMO 2020 Integrated System Plan identified Snowy 2.0 as a critical project for NSW and the NEM, with the potential to unlock the value of both existing and new renewable energy, while delivering reliable energy to consumers.
The Australian Government has introduced legislation to create a $1 billion Grid Reliability Fund (GRF) to be administered by the CEFC. The GRF will support investment in new energy generation, storage and transmission infrastructure. The proposed $1 billion for GRF projects is in addition to the existing CEFC $10 billion capital allocation.
“Through our specialist Clean Futures Team, we have a strong focus on investment in grid augmentation, including transmission, interconnectors, renewable energy zones, hydro, grid-scale battery storage and hydrogen,” Learmonth added.
“We are confident CEFC capital, combined with our expertise in developing new markets and building investor confidence, can help accelerate investment in national building projects that can meet the rapidly evolving requirements of our energy network. This investment with TransGrid Services is an example of the kind of further national building investments we will be able to make through the GRF once it is established.”
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