About the program

In December 2019, AEMO and TransGrid commenced a joint Regulatory Investment Test for Transmission (RIT-T) to assess the viability of increasing interconnector capacity between Victoria and New South Wales.

Strategic planning is critical to ensuring the ongoing reliability and security of the power system, at the least cost and risk to consumers. 

AEMO and TransGrid are jointly undertaking a Regulatory Investment Test for Transmission (RIT-T) to assess the technical and economic viability of expanding interconnector capability between Victoria and New South Wales, to identify the preferred option to meet the identified need, and its optimal timing, in accordance with the National Electricity Rules (NER).

The identified need for investment

The energy landscape across the National Electricity Market (NEM) is changing rapidly. The integration of renewable generation continues to shift the geography and technical characteristics of supply, while an aging fleet of existing conventional generators will progressively withdraw from the market over the coming decades.

This energy transformation is having a dramatic impact on the utilisation of the existing power system. It is increasing network congestion in some areas, while also increasing the system’s reliance on interconnection between regions to facilitate the reliable and efficient sharing of resources between states.

Well-targeted and timely investment in the transmission network is required to keep pace with these changes and provide consumers with the most cost-effective energy outcomes.

This RIT-T aims to realise net market benefits by:

  • Efficiently maintaining supply reliability in Victoria following the closure of further coal-fired generation and the decline in aging generator reliability - including mitigation of the risk that existing plant closes earlier than expected.
  • Facilitating efficient development and dispatch of generation in areas with high quality renewable resources in Victoria and southern New South Wales through improved network capacity and access to demand centres.
  • Enabling more efficient sharing of resources between NEM regions.

Investment options

AEMO and TransGrid are considering network augmentations and non-network options to address the identified need. The recommended solution will be required to address the identified need and maximise net economic benefits to all those who produce, consume and transport electricity in the NEM.

The RIT-T Process

The RIT-T process is a regulatory mechanism defined in the NER that applies an economic cost-benefit test on significant new transmission electricity infrastructure proposed for the NEM. The purpose of a RIT-T is to identify the credible option for meeting an identified need that maximises net economic benefit for all those who produce, consume and transport electricity in the NEM. 

The RIT-T process requires transmission network planners considering significant investment in new transmission infrastructure to publish three reports:

  1. The first report, the Project Specification Consultation Report (PSCR), seeks feedback and advice on the identified need for new transmission infrastructure. 
  2. The second report, the Project Assessment Draft Report (PADR), identifies and seeks feedback on the preferred infrastructure investment option. 
  3. The third report, the Project Assessment Conclusions Report (PACR), presents the transmission planner’s recommended solution to deliver the highest net economic benefit and intended course of action.

AEMO and TransGrid are committed to working with industry, government, investors and consumers on this project as we work to secure and shape Australia’s energy future in the long-term interests of consumers.

We value your feedback on this program and are committed to ongoing dialogue with our stakeholders. We will continue to provide updates as we move through this program. 

For more information, contact 1800 845 044 or email VNIWestRITT@aemo.com.au

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