Managing safe and reliable operation of St Marys substation Version Date Author initials • • • • Option Description of works Capital expenditure ($2023/24) Option 1 $7.0 Option 3 • • Variable / Scenario Central Low risk cost scenario High risk cost scenario Scenario weighting Discount rate Network capital costs Operating and maintenance costs Environmental, safety and financial risk benefit • • •. [...] • • • • • 2 NER 5.16.4(z1) refers to the preferred option being less than $35 million, or as varied in accordance with a cost threshold determination. [...] 𝑛 𝑇𝑄𝑅 = ∑(𝑃𝑜𝐹 × 𝑁𝑜) × (𝐿𝑜𝐶 × 𝐶𝑜𝐶) 𝑛=0 • • • • • • • • 5 See: Industry%20practice%20application%20note%20Asset%20replacement%20planning%20-%2025%20January%202019.pdf. [...] • • • • 12 Inter-Regional Planning Committee. [...] • • • • • • • 17 Australian Energy Regulator, Regulatory investment test for transmission Application guidelines, October 2023, Melbourne: Australian Energy Regulator.
Authors
- Pages
- 42
- Published in
- Australia
Table of Contents
- Executive summary 8
- Identified need: managing risks at St Marys substation 8
- Four credible options have been considered 9
- Non-network options are not expected to be able to assist with this RIT-T 9
- The options have been assessed against three reasonable scenarios 9
- Option 1 delivers the greatest estimated net benefits 10
- Draft conclusion 10
- Exemption from preparing a PADR 10
- Introduction 12
- Purpose of this report 12
- Exemption from preparing a PADR 13
- Submissions and next steps 14
- The identified need 15
- Background to the identified need 15
- Description of identified need 17
- Assumptions underpinning the identified need 18
- Asset health and the probability of failure 19
- Reliability risk 20
- Financial risk 20
- Environmental risk 20
- Safety risk 21
- Credible options 22
- Base case 22
- Option 1 – Replace both T1 and T2 in R24 23
- Option 2 – Replace T2 in R24 and T1 in R29 23
- Option 3 – Replace T2 in R24 and T1 in R34 24
- Option 4 – Replace T2 in R24 and T1 in R39 24
- Options considered but not progressed 25
- No material inter-network impact is expected 25
- Non-Network options 27
- Required technical characteristics of non-network options 27
- Materiality of market benefits 28
- Market benefits considered material 28
- Changes in involuntary load shedding 28
- Market benefits not considered material 29
- Wholesale market benefits 29
- Differences in the timing of expenditure 29
- Option value 30
- Overview of the assessment approach 31
- Description of the base case 31
- Assessment period and discount rate 31
- Approach to estimating option costs 32
- The options have been assessed against three reasonable scenarios 32
- Sensitivity analysis 33
- Assessment of credible options 34
- Estimated gross benefits 34
- Estimated gross costs 34
- Estimated net market benefits 34
- Sensitivity testing 35
- Step 1 – sensitivity testing of the optimal timing 35
- Step 2 – sensitivity of the overall net benefit 36
- Draft conclusion and exemption from preparing a PADR 39
- Appendices 40
- Appendix 1 Compliance checklist 40
