2014 VICTORIAN ANNUAL PLANNING REPORT ELECTRICITY TRANSMISSION NETWORK PLANNING FOR VICTORIA Published: JUNE 2014 2014 VICTORIAN ANNUAL PLANNING REPORT Copyright 2014. Australian Energy Market Operator Limited. The material in this publication may be used in accordance with the copyright permissions on AEMO’s website. 2014 VICTORIAN ANNUAL PLANNING REPORT IMPORTANT NOTICE Purpose The purpose of this publication is to provide information relating to electricity supply and demand and network capability and development, for Victoria’s electricity Declared Shared Network. AEMO publishes the Victorian Annual Planning Report (VAPR) in accordance with clause 5.12 of the National Electricity Rules. This publication is based on information available to AEMO as at 31 March 2014, although AEMO has endeavoured to incorporate more recent information where practical. Disclaimer AEMO has made every effort to ensure the quality of the information in this publication but cannot guarantee that information, forecasts and assumptions are accurate, complete or appropriate for your circumstances. This publication does not include all of the information that an investor, participant or potential participant in the National Electricity Market might require, and does not amount to a recommendation of any investment. Anyone proposing to use the information in this publication (including information and reports from third parties) should independently verify and check its accuracy, completeness and suitability for purpose, and obtain independent and specific advice from appropriate experts. Accordingly, to the maximum extent permitted by law, AEMO and its officers, employees and consultants involved in the preparation of this publication: Make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this publication; and Are not liable (whether by reason of negligence or otherwise) for any statements, opinions, information or other matters contained in or derived from this publication, or any omissions from it, or in respect of a person’s use of the information in this publication. Acknowledgement AEMO acknowledges the support, cooperation and contribution of all electricity industry participants in providing data and information used in this publication. © AEMO 2014 Important Notice i 2014 VICTORIAN ANNUAL PLANNING REPORT EXECUTIVE SUMMARY The 2014 Victorian Annual Planning Report (VAPR) identifies a range of investment opportunities to address emerging network constraints. The Australian Energy Market Operator (AEMO) is the jurisdictional planning body responsible for planning and directing augmentations to the Victorian electricity transmission declared shared network (DSN). AEMO publishes the VAPR, which considers the adequacy of the DSN to meet its reliability requirements over the next 10 years and signals possible network and non-network transmission investment opportunities for potential investors. Emerging investment opportunities Although overall maximum demand is slowing across the Victorian region, there are areas where growth in maximum demand necessitates network investment. This is mainly due to population growth. Accordingly, the 2014 VAPR identifies the following key investment opportunities to address constraints in the network over the next 10 years: Constraints on the Rowville–Malvern line, which services Malvern and surrounding metropolitan areas. Constraints on the Rowville–Springvale–Heatherton line, which services the metropolitan Springvale and Heatherton areas. Constraints on the Keilor – Deer Park – Geelong line, which will service parts of western Melbourne. Constraints on the Dederang–Shepparton line, which services parts of regional Victoria. Constraints on the Ballarat–Horsham line, which services parts of regional Victoria. Constraints on the Rowville A1 500/220 kV transformer, which services parts of eastern Melbourne metropolitan areas. The VAPR also highlights opportunities for non-network solutions such as embedded generation and demand response to address emerging constraints. This could enable AEMO to implement lower-cost solutions to address network constraints. Current investment opportunities The 2014 VAPR presents the following key investment opportunities for which AEMO will be issuing invitations to tender (ITT): The new 220 kV Deer Park Terminal Station. An ITT will be issued in June 2014 requesting submissions to build, own, and operate this new terminal station. Final stage of the Regional Victoria Thermal Capacity Upgrade Regulatory Investment Test for Transmission (RIT-T). An ITT will be issued in the third quarter of 2014 requesting network and non-network solutions in the Bendigo area. Further detail can be found in the supplementary Project Assessment Conclusions Report (PACR) which was published in June 2014. Figure 1 presents a diagram of the emerging limitations and upcoming tenders. Deferred investment The 2014 VAPR has identified that a number of constraints previously identified as investment opportunities can now be deferred. This is due to a decrease in regional electricity maximum demand, and the announced closures of the Point Henry aluminium smelter and car manufacturing plants. For example, an opportunity to address the Geelong–Moorabool 220 kV line constraint identified in the 2013 VAPR has been deferred beyond the 10-year planning horizon, mainly due to the Point Henry closure. AEMO has terminated the Eastern Metropolitan Melbourne Thermal Capacity Upgrade RIT-T based on 2013 electricity demand forecasts which showed a decline in maximum demand. ii Executive Summary © AEMO 2014 2014 VICTORIAN ANNUAL PLANNING REPORT Network reliability Network reliability is difficult to measure. Traditionally it has been measured by the level of redundancy provided. The 2014 VAPR assesses the merits of measuring reliability using Expected Unserved Energy (EUSE). EUSE represents the expected energy demand at risk at each connection point as a result of a network limitation. This methodology builds on AEMO’s existing planning approach, which measures the total maximum EUSE of a network limitation. Using South Morang Terminal Station as a case study, AEMO demonstrates how reliability levels can be measured under a range of contingencies. This will allow reliability levels to be tracked over time at connection point level rather than a regional level, giving customers greater transparency of network reliability levels. It will also enable customers to compare the cost of maintaining network reliability with alternative options. The Victorian Availability Incentive Scheme (AIS) provides incentives to infrastructure asset owners to schedule outages outside peak demand periods. An assessment of the value the AIS provides to support reliability is reported as part of the 2014 VAPR. The report shows that relatively few outages are scheduled on critical assets during peak periods, which is consistent with the incentives provided by the AIS. AEMO intends to work with the Australian Energy Regulator (AER) to incorporate the positive aspects of the AIS into the existing Service Target Performance Incentive Scheme. © AEMO 2014 Executive Summary iii iv Figure 1 — Emerging limitations and upcoming tenders To North To Broken West Bend Hill Buronga Legend 2014 VICTORIAN ANNUA Executive Summary Monash To 500 kV Terminal station/switching station Balranald Murraylink 330 kV Berri Red Cliffs E Emerging limitation 275 kV 220 kV Upcoming tender T 110/132 kV Wemen HVDC Note: All line voltages are operating voltages, as at time of publication. South L PLANNING New South Australia Ballarat-Horsham 66 kV line loading Wales (constrains flows on Horsham-Red Cliffs and Kerang To Wagga To Lower Ballarat-Horsham 220 kV lines) Wagga Tumut Upper Tumut Jindera Shepparton E REPORT E Wodonga Murray Glenrowan Fosterville Jindabyne Horsham Bendigo Dederang Dederang-Shepparton Guthega 220 kV line loading T Geelong-Keilor 220 kV line loading Mount (Supply to Deer Park Terminal Beauty To Tailem Station) Bend Regional Victoria RIT-T Eildon South (non-network solutions in Waubra East Bendigo area) Brunswick Keilor Rowville-Malvern 220 kV Ballarat line loading Mt Sydenham South Morang Gambier Elaine Ringwood Rowville-Springvale- Mortlake E Heatherton 220 kV Tarrone T Moorabool Richmond Rowville line loading Heywood E Yallourn Terang Geelong E Cranbourne E Loy Yang Portland Port Phillip Bay Anglesea Western Basslink Tyabb Port Bay Hazelwood Deer Park Terminal Station French Island Rowville A1 500/220 kV Phillip Island transformer loading NOT TO SCALE Wonthaggi Desalination Plant © AEMO © AEMO To Tasmania Please note: This map only shows terminal stations relevant to the limitations. 2014 See relevant section figures for all and terminal stations and generating units connected to the DSN. 2014 VICTORIAN ANNUAL PLANNING REPORT CONTENTS IMPORTANT NOTICE I EXECUTIVE SUMMARY II CHAPTER 1 - INTRODUCTION 1 1.1 Introduction 1 CHAPTER 2 - NETWORK PERFORMANCE 2 2.1 Introduction 2 2.2 Network summary 2 2.3 Network performance 3 2.4 Victorian transmission constraints 9 2.5 Review of load interruption events 9 2.6 Review of supply to regional Victoria 10 CHAPTER 3 - NETWORK DEVELOPMENT 11 3.1 Transmission development overview 11 3.2 Regional transmission network limitations 11 3.3 DNSP planning 18 3.4 SP AusNet asset renewal 18 3.5 Short-circuit levels for the Victorian electricity transmission network: 2014–18 18 CHAPTER 4 - NETWORK RELIABILITY 19 4.1 Introduction 19 4.2