CEFC Makes Headlines with Record $2 Billion Investment in Transmission Upgrades Amid Rising Costs

The Clean Energy Finance Corporation (CEFC) is closing 2024 with a game-changing announcement, pledging its largest-ever single financial investment of nearly $2 billion to accelerate the development of Australia’s clean energy transmission networks.

This record-breaking investment targets two key projects led by network company Transgrid: the HumeLink project and the New South Wales segment of the Victoria-NSW Interconnector (VNI West). Together, these projects are crucial to creating a clean energy "superhighway" that will facilitate the integration of renewable energy and reduce emissions.

The CEFC’s investment package includes a mix of concessional senior debt and subordinated notes, amounting to $1.92 billion. The funding is structured to draw in private sector capital, ensuring the financial sustainability of these massive infrastructure projects. Additionally, the investment incorporates $140 million in debt finance previously committed to VNI West (NSW).

The HumeLink project, a $4.8 billion endeavor, will span 365 kilometers of 500-kilovolt high-voltage transmission lines, linking Wagga Wagga, Bannaby, and Maragle. Approved by federal environment minister Tanya Plibersek, it is designed to support the Snowy Hydro 2.0 project, delivering 2,000 MW of long-duration storage and enabling 2,570 MW of renewable energy from southwest NSW.

CEFC CEO Ian Learmonth emphasized the national significance of these projects:

“HumeLink and VNI West (NSW) are vital parts of the clean energy solution. This investment will bring low-cost, low-emission energy to users while helping manage project costs that might otherwise burden consumers.”

Despite its ambitious goals, HumeLink has drawn criticism over skyrocketing costs, which have surged from early estimates of $1 billion to $4.8 billion. Energy market veteran Ted Woodley and other critics argue that beneficiaries like Snowy 2.0 and renewable developers, rather than NSW consumers, should bear the brunt of the costs.

Additionally, concerns have been raised about HumeLink's capacity, with critics pointing out its inability to fully accommodate Snowy 2.0’s capacity, future renewable energy projects, and interstate energy transfers simultaneously.

The rising costs of transmission projects were further highlighted by the Marinus Link, an undersea cable connecting Tasmania and mainland Australia. On Friday, the developers announced that Stage 1 costs have increased by 17%, reaching $3.86 billion. Despite the price hike, the project remains on track, with construction set to begin in 2026 and completion targeted for 2030.

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