GHD Advisory enabling efficient renewable energy transmission

Transmission projects are pivotal in Australia’s transition to renewable energy. These large-scale undertakings require rigorous regulatory oversight to make sure they meet the country's evolving energy needs while safeguarding consumers from excessive costs. GHD Advisory's role involves assisting Transmission Network Service Providers (TNSPs) with their applications for funding and regulatory approvals.

The Australian Energy Regulator (AER) imposes stringent requirements on these projects to protect power bills and ensure the efficiency of investments. GHD Advisory supports clients through this process by providing detailed reports and analyses that help the AER assess whether the proposed projects meet regulatory standards.

GHD Advisory's primary client in these projects is TNSPs. These organisations play a crucial role in developing and maintaining the infrastructure needed to support Australia's energy grid, especially as the country increases its use of renewable energy sources. They are responsible for designing and planning transmission networks that are both cost-effective and capable of meeting future energy demands. We have supported their transition to renewable energy by facilitating regulatory approvals and funding applications, enabling their infrastructure to effectively support the evolving energy landscape.

Our role and approach involve:

1. Supporting the application process
Our involvement typically begins when a TNSP is developing their contingent project application. This application is a detailed business case submitted to the AER, requesting approval to proceed with a project and to add its costs to the regulatory asset base. GHD Advisory reviews the project’s design, costing, and risk assessments to ensure they align with the AER's regulatory investment test for transmission (RIT-T).

2. Utilising innovative tools
One of the key tools we developed for AEMO is the Transmission Cost Database (TCD). This tool benchmarks project costs to assess their reasonableness and confirm they align with industry standards. It helps in providing a solid basis for evaluating project estimates during the early stages of development.

3. Comprehensive assessments
We employ both top-down and bottom-up assessment methods. The TCD and other benchmarking offers top-down support, while we also perform detailed bottom-up evaluations. This dual approach ensures that cost estimates are not only benchmarked against industry standards but also scrutinised in detail to verify their accuracy and reasonableness. For example, GHD Advisory reviews component forecasts and considers factors such as biodiversity costs, which are often based on estimates before complete surveys are conducted.

4. Balancing interests
The balance between AEMO’s planning role and the AER’s cost oversight creates a natural tension. GHD Advisory navigates this by making sure that projects meet both the planning requirements and cost-effectiveness standards, helping to align the interests of both regulatory bodies.

Our success in managing large-scale projects, such as the Project Energy Connect transmission line, has established its reputation as a leader in the field. Our skillsets in regulatory processes and project assessment have made the team a preferred partner for transmission projects.
Projects we've been involved in include:

Our role in supporting transmission projects is integral to the successful development and implementation of Australia’s energy infrastructure. By leveraging innovative tools like the TCD and maintaining a rigorous approach to cost and risk assessment.

GHD Advisory provides technical and commercial consulting services that create sustainable economic outcomes for those who own, design, and operate infrastructure and manage the world’s resources. We work with our clients and industry leaders to redefine challenges, drive value and create competitive advantage in the areas of water, energy and urbanisation. Our diverse and talented team supports clients through the business lifecycle from capital deployment to business resilience and optimisation choices, for the purpose of value creation. Drawing on the global expertise of GHD’s 11,000+ engineering, architectural, environmental and consulting professionals to unlock opportunity and support key decisions.