Last week, the AER delivered their final regulatory approval for Project EnergyConnect (PEC) with total costs of $2.28b. This signifies the end of a process that began back in 2016 when the initial project specification report was released. There was some uncertainty around the viability of the project. However, a $295 million investment from the CEFC helped secure the project.
Over most of the PEC planning cycle, the project’s costs for the preferred option were around $1.5b. When the AER published their RIT-T determination, PEC was expected to deliver $924m in net market benefits. This represented a significant benefit-to-cost ratio (1.6:1) at the time. Most of the project’s benefits are associated with avoiding fuel costs for gas-fired generators in South Australia (SA) and, over the long-term offsetting NSW local energy requirements.