NSW funds $225m upgrade for massive power line months after completion

Months after the completion of Australia's largest transmission line, the 700-kilometer Project EnergyConnect (PEC) spanning southern New South Wales, the state government has committed $225 million to an upgrade. The project, which connects NSW to the South Australian and Victorian electricity grids, saw its final cost balloon by 56% to $3.6 billion, exceeding its initial $2.3 billion estimate. Transgrid is seeking to recover some of these costs from consumers through their power bills.

Despite the recent completion of all 1,500 towers and 10,000 kilometers of cabling in December 2025, and the Dinawan substation in April, the NSW government has confirmed that both the substation and a portion of the transmission line require immediate upgrades. This investment is deemed "critical" for the development of the South West Renewable Energy Zone (REZ).

“

The network capacity for the South West REZ has always been planned to be delivered in stages. This is the last piece of the puzzle to get up to the full network capacity that is required to get the generation in the REZ going.

The upgrade will increase the capacity of the Dinawan substation and a transmission line to Wagga Wagga from 330 to 500 kilovolts. EnergyCo, the government authority overseeing the state's renewable transition, described the timing as routine, stating that the network capacity for the South West REZ was always planned in stages. "This is the last piece of the puzzle to get up to the full network capacity that is required to get the generation in the REZ going," said executive project director Phil Bratby.

The state government's funding will cover "early works," including the procurement of long lead-time equipment. While a project development deed has been executed between the government and Transgrid, the bulk of the funding for the substantive work will come from a separate revenue application Transgrid will submit to the Australian Energy Regulator (AER). The two-year upgrade is scheduled to commence in 2027. The Grattan Institute suggests this upgrade is a response to uncertainty surrounding Victoria's VNI West project.

“

We are avoiding duplication of works, reducing project costs and accelerating delivery, which is in the best interests of electricity consumers. This approach enables portions of the network to be progressively developed in accordance with [the] Australian Energy Market Operator's Integrated System Plan.