CONSULTATION INFORMATION REPORT
POTENTIAL NEW LARGE NETWORK ASSET INVESTMENT
AUGMENTATION of ELECTRICITY SUPPLY to
DUBBO and the WESTERN AREAS of NSW
Disclaimer:
This document has been prepared and made available solely for information purposes. Nothing in this document
can be or should be taken as a recommendation in respect of any possible investment. This document does not
purport to contain all of the information that a prospective investor or participant or potential participant in the
National Electricity Market, or any other person or interested parties may require. In preparing this document it is
not possible nor is it intended for Essential Energy to have regard to the investment objectives, financial situation
and particular needs of each person who reads or uses this document.
In all cases, anyone proposing to rely on or use the information in this document should independently verify and
check the accuracy, completeness, reliability and suitability of that information and the reports and other
information relied on by Essential Energy in preparing this document, and should obtain independent and specific
advice from appropriate experts or other sources.
Accordingly, Essential Energy makes no representations or warranty as to the accuracy, reliability, completeness or
suitability for particular purposes of the information in this document. Persons reading or utilising this document
acknowledge that Essential Energy and their employees, agents and consultants shall have no liability (including
liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information
or matter (expressed or implied) arising out of, contained in or derived from, or for any omissions from, the
information in this document, except insofar as liability under any New South Wales and Commonwealth statute
cannot be excluded.
CONTENTS PAGE
1
2
3
INTRODUCTION ...................................................................................................................................... 3
PURPOSE AND SCOPE........................................................................................................................... 4
BACKGROUND ....................................................................................................................................... 5
3.1
3.2
3.3
4
OPTIONS ANALYSIS ............................................................................................................................... 9
4.1
4.2
4.3
4.4
5
SUPPLY TO THE AREA ......................................................................................................... 5
NETWORK DEMAND ............................................................................................................. 7
NETWORK LIMITATIONS ...................................................................................................... 8
NETWORK OPTIONS .......................................................................................................... 10
OPTION 1 – CONSTRUCTION OF A NEW 132KV LINE BETWEEN
WELLINGTON AND NARROMINE WITH THE FUTURE RECONSTRUCTION
(10-15 YEARS) OF THE DUBBO WEST 66KV SUPPLY ASSETS ...................................... 10
OPTION 2 - CONVERT THE EXISTING WELLINGTON/DUBBO/DUBBO
WEST/NARROMINE 66KV ASSETS TO 132KV .................................................................. 11
NON-NETWORK OPTIONS ................................................................................................. 12
PRELIMINARY APPLICATION OF THE REGULATORY TEST ................................................................. 13
5.1
5.2
5.3
FORM OF THE REGULATORY TEST ................................................................................. 13
BASE CASE ANALYSIS ....................................................................................................... 13
SENSITIVITY ANALYSIS ..................................................................................................... 14
6
PRELIMINARY CONCLUSIONS ............................................................................................................. 14
7
CONSULTATION CONTACT DETAILS .................................................................................................... 15
APPENDIX A .......................................................................................................................................................... 16
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 2 of 16
1 INTRODUCTION
This Consultation Information Report has been prepared to provide information to registered
participants, AEMO and interested parties in relation to the Consultation Notice published inviting
submissions in respect of the requirement to correct network constraints identified in relation to
electricity supply to Dubbo and the western areas (Narromine, Nevertire, Nyngan, Cobar & Bourke) of
the Central West of New South Wales.
Consultation is being undertaken by Essential Energy in accordance with Section 5.6.2 (Network
Development) and Section 8.9 (Rules Consultation Procedures) of the National Electricity Rules given
that the potential network development will result in a new large distribution network asset
investment.
Further stages of the consultation process will include:
Stage 2; being the publication of a draft report based on the Consultation Information Report
and the consideration of valid submissions received in response to the Consultation Notice.
Stage 3; being the publication of a final report following the consideration of valid
submissions received in response to the draft report, and which sets out the conclusions
reached in respect of the matter under consultation, the reasons for the conclusions, and a
summary of the consultation procedures and responses.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 3 of 16
2 PURPOSE AND SCOPE
Essential Energy (EE) owns the sub-transmission and distribution network in the Dubbo and western
areas of NSW and is responsible for planning and developing its network to meet the requirements
of customers within its region.
Essential Energy has responsibilities under the National Electricity Rules (the Rules) to carry out
planning to facilitate the optimal development of Essential Energy’s distribution network.
A number of constraints have been identified on the Essential Energy network supplying Dubbo and
the western area of NSW. Essential Energy is required to address the constraints in order to comply
with licence conditions and service standards as outlined in Section 3.3.1.
Essential Energy has considered the workable options available to address the identified constraints
and assessed their economic cost effectiveness in terms of satisfying the regulatory test. Information
in respect of these options and the economic cost assessment and allocation is presented in this
Consultation Information Report and is provided to assist consulted parties in considering initial
submissions in response to the Consultation Notice.
The Consultation Information Report also provides information on the existing network, recorded and
forecast peak load demands and the identified network limitations as the basis for defining and
assessing the likely workable options available to correct the limitations.
The information provided in the report is indicated in the Contents Page included at the start of the
report.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 4 of 16
3 BACKGROUND
3.1
SUPPLY TO THE AREA
The area of investigation is the Dubbo and the Western area (Narromine, Nevertire, Nyngan, Cobar
and Bourke) and its surrounds. Dubbo is located approximately 300km north west of Sydney with
Nyngan a further 155km north west of Dubbo in the Central West of New South Wales.
A location map of the investigation area is shown below in Figure 1.
Figure 1 – Location map of the investigation area
The Dubbo and western areas are presently supplied via 132kV power lines from the TransGrid bulk
supply point (BSP) substation at Wellington. Essential Energy’s Dubbo and Western area
Subtransmission system is illustrated in Figure 2 below. It comprises nine (9) 132kV zone
substations (ZS), fourteen (14) 66kV zone substations, approximately 622km of 132kV line and
680km of 66kV lines as summarised below:
the TransGrid (TG) wellington 330/132kV BSP substation,
2 x 132kV lines (94F and 94J) from the TG Wellington substation to the EE Dubbo (Wheelers
lane) 132/66kV ZS, each approximately 47km long with a nominal thermal rating of
167MVA,
The Wheelers Lane (Dubbo) 132/66kV ZS contains 3 x 45MVA transformers with a firm
90MVA firm capacity,
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 5 of 16
The Dubbo city 66kV and regional Subtransmission system which consists of the Phillip St
ZS, Eulomogo ZS with an on feed to Geurie/Wellington, Yarrandale ZS with an on feed to
Gilgandra/Gulargambone/Coonamble and Dubbo West ZS with on feed to Narromine,
The Dubbo South 132/11kV ZS,
2 x 132kV on feeds to Nyngan with tee connections to the Narromine 132/22kV ZS (943 line
is approximately 175km and 107MVA nominal rating) and the Nevertire 132/22kV ZS (93W
line is approximately 175km long and 128MVA nominal thermal ratings),
The Nyngan 132/66kV ZS,
The Nyngan region 66kV Subtransmission system which consists of the Nyngan town ZS,
Nevertire alternate supply, Girilambone/Bourke supply and Cobar town ZS,
The Nyngan 132kV on feed (946 line which is approximately 120km and 107MVA nominal
rating) to the Cobar mines (Peak, CSA and Endeavour 132/11kV ZS).
Figure 2 below shows the sub-transmission network supplying the Dubbo and western area from
TransGrid’s Wellington 330/132kV substation.
Wellington, Dubbo, Nyngan
Bourke
Byrock
Coonamble
Coolibah Regulator
Cobar Elura
Gulargumbone
Girilambone
Cobar
CSA
Tritton Resources
Mines
Cobar Town
Nyngan
Town
Gilgandra
NO
Scrubby Valley
Switching Stn
Cobar
Peak
Nevertire
NYNGAN
Beryl
Mt Boppy Mine
Phillip St
Narromine
Yarrandale
DUBBO
Dubbo
West
N.O.
Eulomogo
Dubbo
South
Geurie
Wellington
Town
Parkes
Essential Energy Zone Substations
TransGrid Subs
330/132kV
66/11kV
66/22kV
132/11kV
132/66/11kV
Orange
Transmission & Sub-trans. Lines
330 kV
132kV
66kV
132/66kV Dubbo, Nyngan
132/66/22kV
Mumbil
Essential Energy Lines
66/33/22kV
132 kV Essential Energy-owned
Figure 2 – Existing western area sub-transmission network
In addition, EE is progressing with the construction of a number of network augmentation projects to
address identified constraints on the Dubbo Subtransmission network, which include:
Augmentation of the Yarrandale zone substation installation of a second transformer to
increase supply capacity and security,
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 6 of 16
A second 66kV line from the Wheelers Lane substation to the Yarrandale zone substation to
provide N-1 supply to Yarrandale and the on feed to Gilgandra,
The construction of the Narromine South 132kV switching station (S/S) to improve security
of supply to the Narromine zone substation, provide an alternate supply for the Dubbo West
ZS and improve the Narromine/Nyngan 132kV line fault isolation and protection.
3.2
NETWORK DEMAND
Detailed demand information for the 132kV load west of Wellington is available from time based
statistical metering fitted at the TransGrid Wellington 330/132kV substation on both the 132kV
(94F & 94J) lines. Metering at other points throughout the network provides information on the load
components, subject to some constraints on site specific availability and reactive power data.
The load is summer peaking with a maximum demand of 181.8MW having been recorded in January
2011. The load history and projections including the 2010/11 summer demand is shown in Figure 3
below. This shows an average load growth trend (POE50) of approximately 2.5MW pa with a high
(P0E10) value of 3+ MW pa.
Figure 3 – Western Area Maximum Demand (from the 94F & 94J 132kV lines ex Wellington)
The present maximum demand, ex-Wellington load, is divided approximately equally between the
Dubbo 66kV network load and the 132kV on feed to Nyngan which includes the Dubbo South
(9+MVA), Narromine (12+MVA), Nevertire (5+MVA), Nyngan 132/66kV (30MVA) and Cobar 132kV
on feed (30+MVA) load components.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 7 of 16
Load growth is focussed on the Dubbo city area development and the widespread scope for new and
expanded spot loads, particularly from the mining industry. Examples of this include enquiries for the
incremental increase to the existing Cobar mine loads, expansion of the Tritton/Girilambone
operation and the long mooted Toongi zirconia mine to the south of Dubbo. Supply to other potential
mining developments is constrained by their remoteness from the existing grid services.
3.3
NETWORK LIMITATIONS
The Essential Energy network supplying the Dubbo and western areas of the central west is affected
by a number of existing and pending constraints which require consideration as outlined below.
3.3.1
Service Standards
Schedule 5.1 of the National Electricity Rules details the Network Performance Requirements that
Essential Energy are obliged to meet.
In addition, Essential Energy’s Network Planning Standards are underpinned by mandatory licence
conditions for Distribution Network Service Providers (DNSP’s) which, inter alia, set out reliability
standards for sub-transmission and distribution networks. The licence conditions for Essential
Energy specify N-1, one minute reliability levels for sub-transmission supply to loads equal to or
greater than 15 MVA.
N-1 supply constraints can arise where supply depends on a single network element (eg a radial line
or single transformer substation); loads exceed the nominated thermal capacity of network elements
or satisfactory voltage levels cannot be maintained with the load demand to be supplied. A
combination of these conditions exists on the Dubbo and western area Subtransmission network.
3.3.2
Primary 132kV supply from Wellington: N-1 Capacity (Thermal Rating)
The existing supply from the TG Wellington substation is now clearly subject to an N-1 capacity
constraint with the recorded 2010/11 summer peak demand of 182MW being some 15 MVA
greater than the nominal 167MVA rating of the 2 x 132kV (94F & 94J) Wellington to Wheelers Lane
(Dubbo) circuits. The maximum load can now often reach or exceed the nominal line rating limit.
3.3.3
Wheelers Lane to Dubbo South supply: N-1 voltage regulation constraint
The 132kV line load from Wheelers Lane to Dubbo South has a non-contingent maximum demand of
approximately 50MVA being the Dubbo South 132/11kV ZS load, the Narromine 132/22KV ZS load
and approximately half (30MVA) of the 132kV on feed to the Nyngan 132/66kV substation and as
such is required to have N-1 security.
The loss of this line results in the collapse of supply voltages at the Dubbo South and Narromine
substations and unacceptably low voltages at the Nyngan and Cobar area substations due to the
resulting high network impedance with all load being supplied through the relatively long
Dubbo/Nevertire/Nyngan line.
3.3.4
Dubbo South to Narromine supply: N-1 voltage regulation constraint
The Dubbo South to Narromine 132kV circuit (943) load is approximately 40MVA (being reduced by
Dubbo South load) and hence also requires N-1 supply for licence compliance. The loss of this line
results in unacceptable low voltages similar to that for a Wheelers Lane to Dubbo South fault.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 8 of 16
3.3.5
Wheelers Lane (Dubbo) 66kV capacity: N-1 Transformer capacity constraint
The Wheelers Lane substation is fitted with three 45MVA transformers and thus has a nominal N-1
(firm) supply capacity of 90MVA which is equal to the present maximum load on the Dubbo 66kV
Subtransmission system load.
With ongoing development in the Dubbo area, expected to be the main driver of the projected
2/3MVA pa average load growth, the network development strategy is to cap the 66kV network load
to the firm 90MVA limit through the progressive development of direct 123kV supply capacity.
This strategy is being implemented through the commissioning of the 132/11kV Dubbo South ZS
and the construction of the Narromine South 132kV switching station which supports the Dubbo
West 66/11kV ZS load form the 132kV network.
3.3.6
Dubbo West ZS supply capacity: Capacity and N-1 constraint
Supply to the Dubbo West ZS is provided from the Wheelers Lane ZS by an ageing 66kV copper
conductor line which on-feeds to the Narromine ZS. Part of the Wheelers Lane supply circuit requires
relocation to address safety concerns from easement encroachments and the rating needs to be
substantially increased to provide the capacity for load increases as part of the overall Dubbo supply
strategy followed by the future conversion to 132kV. The Narromine line also requires capacity
augmentation and has been identified as needing substantial refurbishment or reconstruction to
address the ageing asset condition. Reconstruction would be to a 132kV design to meet the
projected supply needs.
Augmentation work on the Dubbo West ZS supply requires the completion of the Narromine South
132kV switching station to provide an alternate supply source to allow the target lines to be removed
from service for the augmentation work period. Supply capacity and security limitations currently
restrict the scope for increases in the Dubbo West ZS load connections.
3.3.7
Overall Network Voltage Regulation
The Dubbo and western area 132kV network has been progressively augmented over time and has
now reached the situation where voltage regulation is a significant operating consideration both for
every day load and fault conditions. Its inherent characteristics of long circuit lengths and scattered
load centres makes capacitor support necessary to manage low supply voltage issues with the
management of high voltages being an issue during low load and post fault periods. Whilst voltage
regulation limits can be improved by more complex reactive support, load flow studies and operating
experience indicate that further basic augmentation is most likely needed to both increase the
overall supply capacity and reduce the network supply impedance.
4 OPTIONS ANALYSIS
Essential Energy has sought to identify a range of technically feasible network and non-network
options that could satisfy the network requirements in a timely and efficient manner.
As a result of this process, Essential Energy has identified a range of options that represent the most
practical options to address the network limitations. These are detailed in the remainder of this
section.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 9 of 16
4.1
NETWORK OPTIONS
When developing options to overcome actual or potential network constraints, Essential Energy
initially assess possible options against the requirements and then applies the regulatory test to
those which satisfies them.
The primary consideration is the need for additional supply capacity from the Wellington substation
with the construction of a third 132kV circuit, which could almost double the nominal firm rating (to
over 300MVA), being the only reasonable option to achieve this. An additional 132kV circuit would
also improve voltage regulation for loads beyond Dubbo by minimising the source variation for the
loss of one incoming supply circuit.
Security of supply, voltage regulation and substation line access issues make Narromine an ideal
connection point for a third circuit from Wellington given that it would:
-
provide the needed increase in primary supply capacity,
-
avoid the need for two additional circuit connections to the Wheelers Lane or Dubbo South
substations as possible alternate connection locations. Either substation would present
major issues with new circuit access and require the use of underground cable,
-
utilise the pending Narromine South 132kV switching station (S/S) 132kV bus bar for
connection,
-
provide the need N-1 support for the Dubbo South and Narromine ZS’s,
-
improve the voltage regulation to the network generally and Nyngan focussed loads
specifically,
-
facilitate the ongoing development of load supply from the 132kV rather than the 66kV
network.
Two workable network options have been identified and evaluated to provide a third 132kV circuit
from the Wellington substation to the Narromine 132/66kV substation, these being to either the:
i)
Construction of a new 132kV line on a new easement between Wellington and
the Narromine followed by the future (ten year) reconstruction of the
Narromine/Dubbo West/Wheelers Lane 66kV connection to 132kV,
ii)
The conversion of the existing Wellington to Dubbo, Dubbo to Dubbo West and
Dubbo West to Narromine 66kV assets to 132kV.
These options are outlined below.
4.2
OPTION 1 – CONSTRUCTION OF A NEW 132KV LINE BETWEEN WELLINGTON AND
NARROMINE WITH THE FUTURE RECONSTRUCTION (10-15 YEARS) OF THE DUBBO WEST
66KV SUPPLY ASSETS
This option would require the acquisition of an easement and construction of a new 132kV circuit
between the TG Wellington substation and the Narromine South 132kV Switching Station (under
construction) together with the provision of connection circuit breaker bays.
Preliminary investigations indicate that a route would run generally to the west of Wellington across
the Macquarie River and then in a north-westerly direction up to the Narromine 132kV switching
station. The estimated indicative line length would be approximately 85kms.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 10 of 16
The continuing requirement to constrain demand on the Dubbo 66kV system with load growth
supplied from the 132kV network will require the reconstruction of the ageing Narromine/Dubbo
West and Dubbo West/Wheelers Lane 66kV lines and there conversion to 132kV operation along
with the Dubbo West ZS. This could be required within a minimum of ten years and up to twenty
years.
The resulting network configuration for Option 1 is illustrated in Figure 4 below.
Future reconstruction of 66kV
assets to 132kV (in10-15 years)
Nyngan
132
94W
DUBBO
132
943/2
Narromine
808N
To Gilgandra
812
Yarrandale
Wheelers Lane
Phillip St
Eulomogo
To
Dunedoo
Narromine
South S/S
Dubbo West
94J
BERYL
Geurie
Gulgong
N.O.
851
79
94B
94F
806
94K
New 132kV line between
Wellington & Narromine S/S
Ulan S/S
851
N.O.
813
Dubbo
South
Wollar
852
94M
Mudgee
Mt Piper
Parkes
72
Wellington132
Mt Piper
805
Mumbil
947/1
Orange North
WELLINGTON 330
945/2
Molong
Figure 4 – Option 1, Construct a new 132kV line between Wellington & Narromine substation
As indicated in Section 5, the present value cost of this option has been assessed to be $36.26M.
4.3
OPTION 2 - CONVERT THE EXISTING WELLINGTON/DUBBO/DUBBO WEST/NARROMINE
66KV ASSETS TO 132KV
This option would bring forward the refurbishment of ageing 66kV assets, (these being the
Wellington to Dubbo via Geurie, the Wheelers Lane to Dubbo West and Dubbo West to Narromine
66kV lines along with the existing substations of Geurie and West Dubbo) and their conversion to
132kV. The 132kV conversion of the Dubbo West ZS being consistent with the strategic commitment
to service load increases in the Dubbo city area directly from the 132kV network.
It would maintain the existing overall supply circuit lengths with no increase in maintenance costs.
The option would involve the following works:
Negotiations of line easement changes from 66kV to 132kV were required.
The re-establishment of the Beryl to Wellington 66kV line to provide back-up supply
to Wellington Town ZS when the Wellington to Geurie 66kV line is taken out of
service to be rebuilt at 132kV,
The reconstruction of the existing Wellington to Geurie 66kV line to 132kV,
The establishment of a 132kV substation at Geurie to replace the existing 66kV
substation,
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 11 of 16
The reconstruction of the existing Geurie to Eulomogo 66kV line to 132kV,
The construction of approximately 1.0km of new 132kV line to connect the 132kV
reconstructed Wellington to Eulomogo line into the existing Wheelers Lane to Dubbo
South 132kV line (which will change the Dubbo South supply from Wheelers Lane to
Wellington),
The reconstruction of the existing Wheelers Lane to Dubbo West 66kV line to 132kV
with connection to the ex Dubbo South 132kV line circuit breaker at Wheelers lane,
The conversion of the existing Dubbo West ZS from 66/11kV to a 132/11kV two
transformer installation,
The reconstruction of the existing Dubbo West to Narromine 66kV line to 132kV
with connection to the new Narromine South 132kV switching station.
As indicated in Section 5, the assessed present value cost of this Option is $27.18M.
The proposed network configuration for Option 2 is illustrated in Figure 5 below.
Nyngan
132
94W
DUBBO
132
943/2
Narromine
808N
Narromine
South S/S
To Gilgandra
812
Yarrandale
Dubbo
South
Phillip St
Eulomogo
Dubbo West
94J
Re-establish existing Beryl to
Wellington Town 66kV (806) line
To
Dunedoo
BERYL
Ulan S/S
851
813
Gulgong
851
79
Geurie
94B
Convert existing 66kV
assets to 132kV
Wollar
852
94F
806
94K
94M
Mudgee
Mt Piper
Parkes
72
Wellington132
Mt Piper
805
Mumbil
947/1
Orange North
WELLINGTON 330
945/2
Molong
Figure 5 – Option 2, Convert the existing Wellington to Narromine 66kV assets to 132kV
4.4
NON-NETWORK OPTIONS
Over and above the regulatory requirements set out in Section 3 above, Essential Energy also carries
out an assessment under the NSW Demand Management Code of Practice for Electricity Distributors
(2004). This assessment includes a ‘Reasonableness’ test to determine whether it would be
considered ‘reasonable’ to expect that a non-network measure could be cost effectively employed to
defer or avoid the network investment.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 12 of 16
The Essential Energy ‘Reasonableness’ test includes an assessment of the nature and level of load
at risk together with the potential financial payments available to support a non-network alternative
to a network augmentation.
The various constraints on the Dubbo and western area Subtransmission system have been
described above. These include N-1 capacity and voltage regulation constraints which would require
the right level of support to be available at the right location at the right time to address the network
constraints.
The identified preferred network solution can provide the presently needed 15MVA of capacity
support together with the future projected potential increases of 2/3MVa per year, for an assessed
present value of cost of $27.18M. This equates to an annualised cost of $180/kVA, decreasing with
time, which would be available to support for a non-network solution.
Voltage regulation constraints on the Dubbo South and Narromine ZS supply loads would require a
higher level of support which would need to be provided at the critical locations within the network.
Non-network support would also need to be available and be activated during the various risk
periods which would impose a significant operating demand on any mooted options.
To assist any interested party with developing a preliminary non-network alternative into a final
proposal for evaluation, Essential Energy, will engage with a proponent to discuss, review, and
provide more detailed information pertaining to the formulation of any such proposal.
5 PRELIMINARY APPLICATION OF THE REGULATORY TEST
A preliminary application of the regulatory test to Options 1 and 2 has been undertaken. The results
are summarised in the following sections.
5.1
FORM OF THE REGULATORY TEST
The options covered by this Application Notice are reliability augmentations and the regulatory test is
to be applied in accordance with clause 1(a) of the test:
(a)
in the event the option is necessitated solely by the inability to meet the minimum
network performance requirements set out in schedule 5.1 of the Rules or in relevant
legislation, regulations or any statutory instrument of a participating jurisdiction - the
option minimises the present value of costs, compared with a number of alternative
options in a majority of reasonable scenarios;
The values used as the basis for the evaluation are shown below in Table 1.
Parameter
Real Discount Rate
Marginal Annual O&M Cost
Capital Costs
Base Case Value
9%
2% of Capital Cost
Nominal Value
Sensitivity Checks at
6% and 12%
1% and 3% of Capital Cost
±25% variation
Table 1 – Values Used in Financial Analysis
5.2
BASE CASE ANALYSIS
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 13 of 16
The Present Value of Costs for the two options is shown below in Table 2. Further details on the
analysis are provided in Appendix A.
Option
Description
Construction of a new 132kV line between Wellington and
Narromine with the future reconstruction (10-15 years) of the
Dubbo West 66kV supply assets
Convert the existing Wellington/Dubbo/Dubbo West/Narromine
66kV assets to 132kV
Option 1
Option 2
PV of
Costs
($M)
Rank
$36.26
2
$27.18
1
Table 2 – Comparison of Options for the Base Case
5.3
SENSITIVITY ANALYSIS
The results of the sensitivity analysis performed over a range of cases are shown below in Table 3.
The sensitivity analyses cover the parameters shown in Table 1.
Option 1
Sensitivity Case
Option 2
PV of Costs ($M)
Rank
PV of Costs ($M)
Rank
Base Case (Average Growth)
36.26
2
27.18
1
12% Discount Rate
32.12
2
25.66
1
6% Discount Rate
42.13
2
28.86
1
25% Increase in Costs
45.32
2
32.68
1
25% Decrease in Costs
27.19
2
21.75
1
1% O&M Costs
33.38
2
27.18
1
3% O&M Costs
39.14
2
27.18
1
20% increase in length
42.02
20% decrease in length Low Growth
30.49
Table 3 – Results from the Sensitivity Analysis
Option 2 has the lowest present value of costs for all sensitivity cases.
6 PRELIMINARY CONCLUSIONS
The results of the preliminary application of the regulatory test have shown that Option 2, involving
the reconstruction of existing 66kV assets to 132kV, is the least cost network alternative for all the
cases considered.
This option also results in other network supply benefits by changing one of the normal supply lines
to Dubbo and to Narromine from aged, unshielded 66kV lines to new, fully shielded 132kV
constructed lines and retires approximately 87km of aged 66kV lines. These added benefits
enhance the indicated marginal saving in present value costs.
This option would be the network solution preferred by Essential Energy.
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 14 of 16
7 CONSULTATION CONTACT DETAILS
In accordance with the Consultation Notice published on the AEMO and Essential Energy web sites,
Essential Energy invites written submissions from registered participants and interested parties on
the information provided in this Consultation Report and for alternative non-network options to
correct the indicated network constraint in respect of the electricity supply to Dubbo and the Western
area.
Submissions must be received by no later than Friday 11 May 2012.
Submissions or other enquires should be directed by email to:
[email protected]
Consultation Information Report – Augmentation of Electricity Supply to Dubbo and the Western Area of NSW
Page 15 of 16
APPENDIX A
Base case Present Value of Costs. The figures shown are real 2012 dollars expressed in ‘Millions of Dollars’ ($ Million).
Note: For those yearly columns beyond 2018/19, only those which have capital expenditure are shown.
OPTION 1 - Construction of a new 132kV line between Wellington and Narromine with the future reconstruction (10-15 years) of the
Dubbo West 66KV supply assets
12/13
13/14
14/15
15/16
16/17
17/18
18/19
32/33
52/53
Capital Expenditure
1) Obtain new easement
2) design & construct new 132kV line bays
3) Design & construct new 132kV line
4) Rebuild Narromine to West Dubbo
5) Rebuild West Dubbo to Wheelers Lane
6) Convert Dubbo West from 66 to 132kV
$5.95
Increase in O&M
Avoided O&M
Total Expenditure
PV of Costs
0.12
0.00
6.07
36.26
$1.40
$21.25
$8.91
$2.49
$4.02
0.57
0.00
23.23
M
0.57
0.00
0.57
0.57
0.00
0.57
0.57
0.00
0.57
0.57
0.00
0.57
0.57
0.00
0.57
0.57
0.00
16.00
0.57
0.00
0.57
OPTION 2 - Convert the existing Wellington/Dubbo/Dubbo West/Narromine 66kV assets to 132kV
12/13
13/14
14/15
15/16
16/17
17/18
18/19
52/53
0.40
1.57
0.10
0.13
4.02
7.44
0.54
0.93
0.00
0.00
15.12
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Capital Expenditure
A)Re-establish Beryl to Wellington
B) Wellington to Geurie 132kV line
Removal of old 66kV line
Welling to Geurie easement re-establishment
D) Geurie 132kV Sub
C) Geurie to Eulomogo 132kV line
Removal of old 66kV line
Geurie to Eulomogo easement re-establishment
E) Eulomogo to tee into WL to Dubbo Sth 132kV line
New easement for the above 132kV line
G) Remove Dubbo Sth 132kV line connection from Wheelers
Lane
H) Wheelers Lane to Dubbo West 132kV line
Removal of old 66kV line
Re-establish easement
I) Dubbo West Sub work
J) West Dubbo to Narromine 132kV line
Removal old 66kV line
Re-establish easement
Increase in O&M
Avoided O&M
Total Expenditure
PV of Costs
1.61
4.30
0.26
0.45
2.07
7.20
0.53
0.90
0.25
0.07
0.00
0.00
8.69
27.18
0.00
0.00
8.95
Million