Modern Australian
The Times

what is the electricity transmission system, and why does it need fixing?

  • Written by Tony Wood, Program Director, Energy, Grattan Institute

Shifting Australia to a low-emissions energy system is a big challenge. Much has been said of the need to change the electricity generation mix, from mostly fossil fuels to mostly renewables. Yet our electricity transmission network must also be overhauled.

The transmission network largely consists of high-voltage cables and towers to support them, as well as transformers. This infrastructure moves electricity from where it’s generated, such as a coal plant or wind farm, to an electrical substation. From there, the distribution network – essentially the “poles and wires” – takes the electricity to customers.

On Australia’s east coast, increased renewable energy generation is already stretching the capacity and reach of Australia’s ageing transmission network. New capacity is being built, but is struggling to keep up.

In his budget reply speech last week, Labor leader Anthony Albanese pledged to create a A$20 billion corporation to upgrade Australia’s energy transmission system. So let’s take a look at what work is needed, and what’s standing in the way.

Anthony Albanese, centra, with Labor frontbenchers Labor leader Anthony Albanese’s budget reply speech included a $20 billion plan to upgrade transmission networks. Mick Tsikas/AAP

Starting with the basics

The electricity grid covering Australia’s east is part of the National Electricity Market (NEM). It’s one of the largest interconnected electricity networks in the world, and covers every jurisdiction except Western Australia and the Northern Territory.

The NEM comprises:

  • electricity generators (which produce electricity)

  • five state-based transmission networks, linked by interconnectors that enable electricity to flow between states

  • the distribution network (poles and wires)

  • electricity retailers (which sell electricity to the market)

  • customers, such as homes and businesses

  • a financial market in which electricity is traded.

The NEM’s transmission grid currently has a long, thin structure, running from the north of Queensland to the south of Tasmania and the east of South Australia. This reflects the fact that electricity has traditionally been produced by a small number of large, centralised (mostly coal and gas) generators.

Electricity transmission infrastructure Electricity transmission infrastructure is expensive and complex to upgrade.

Who owns and runs transmission networks?

Australia’s electricity networks were originally built and owned by state governments, mostly during the latter half of the 20th century. Over several decades, interstate transmission interconnectors were built to share resources more efficiently across borders. The NEM was formally created in the late 1990s.

Between 2000 and 2015, several states either partly or fully privatised their transmission networks, leading to the mixed model of today. The transmission companies are monopoly providers, and the prices they charge are set by the Australian Energy Regulator (AER).

Read more: Sure, no-one likes a blackout. But keeping the lights on is about to get expensive

The Australian Energy Market Operator (AEMO) operates the national market and is responsible for transmission planning. In Victoria, AEMO also decides on transmission investments. In the other jurisdictions, that role rests with the transmission companies.

In the past, electricity companies made some infrastructure investments far beyond what was needed – mostly in distribution networks, but also in transmission. This so-called “gold plating” of networks led to inflated costs for consumers, who ultimately pay for the investments via their power bills.

A $50 note in a power socket The cost of transmission upgrades is passed onto power consumers. Julian Smith/AAP

Why do the transmission networks need fixing?

Renewables have increased the total NEM generation capacity from 40 gigawatts to 60 gigawatts since 2007. More than 30 gigawatts of renewable generators and 12 gigawatts of energy storage are expected to come online by 2040.

In mid-2017, a panel led by Australia’s Chief Scientist Alan Finkel recommended a plan be drawn up to create “renewable energy zones”. These would coordinate the development of new renewable projects with new grid infrastructure.

The zones were contained in AEMO’s 2018 “Integrated System Plan (ISP). It identified transmission projects that should start immediately, and possible future projects.

Two initial projects involve expanding the system’s capacity between Queensland, New South Wales and Victoria. Possible future projects include a second interconnector between Victoria and Tasmania.

Read more: In a world first, Australian university builds own solar farm to offset 100% of its electricity use

But upgrading the transmission grid is easier said than done. The large size and cost of new transmission lines means planning and approval is subject to lengthy, intensive economic assessments.

What’s more, renewable energy generators are often built in regional areas, where solar and wind energy are plentiful. In many cases the electricity grid in those areas, designed in a different era, doesn’t have the capacity to accommodate them.

In September, the Energy Security Board (ESB), created by COAG energy ministers, said the transmission grid must be reconfigured along the lines of the ISP to suit the emerging mix of renewable generation and storage. This means upgrading existing interconnectors, and building new interconnectors and intrastate transmission from regional areas to coastal centres.

Transmission lines The Energy Security Board has called for transmission infrastructure upgrades. Shutterstock

Weighing the political promises

Labor leader Anthony Albanese last week released a A$20 billion "Rewiring the Nation” policy to upgrade the grid. It would establish a government-owned body to partner with industry, providing low-cost government finance for the upgrades.

The Morrison government, for its part, is also working on transmission solutions. It’s supporting projects prioritised in the ISP, including up to A$250 million allocated in this month’s federal budget.

Some states have separately accelerated their own high-priority transmission projects. However, none of the above measures effectively solve two big impediments to modernising the transmission network.

Read more: Energy giants want to thwart reforms that would help renewables and lower power bills

First, the processes to identify, analyse and build transmission projects is too slow. Second, a state’s transmission infrastructure is currently paid for by consumers in that state – a poor fit for the increasingly integrated, and therefore shared, national grid.

Much work must be done to address these issues. Perhaps a government-owned national company could be established. It would own the shared transmission system, while AEMO would drive what gets built. Operations could be outsourced to a private company to deliver efficiencies.

Separating planning from owning would minimise the perverse financial incentives that led to past “gold plating”.

To minimise the risk of white elephants being built, strong, up-to-date benefit-cost assessments would be required.

Such alternatives will come with their own challenges. But the transition towards low emissions is too important for radical solutions to be ignored.

Authors: Tony Wood, Program Director, Energy, Grattan Institute

Read more https://theconversation.com/explainer-what-is-the-electricity-transmission-system-and-why-does-it-need-fixing-147903

Bottle Label Printing: Key Factors to Consider Before Your Next Packaging Run

Effective packaging begins with understanding the product, bottle material, artwork and production requirements when planning bottle label printing. H...

Planning a Long-Distance Move With Interstate Movers Melbourne

Moving between states involves more planning than a typical local relocation. Along with packing and transporting household belongings, you need to...

Understanding the Role of an I/O Controller in Industrial Automation

Modern industrial systems depend on accurate communication between sensors, machines and control systems. An I/O controller can help manage this commu...

How the Right Mining Hose Supports Demanding Operations

Mining environments place considerable demands on equipment used for material transfer, water management and processing. Hoses operating in these co...

Simple Ideas for Making Social Gatherings More Memorable

We have all been to those parties where everyone just stands around the kitchen island, staring at their phones, waiting for someone else to make a mo...

Outdoor Wall Lights: Improving Exterior Lighting Around Your Home

Lighting can influence how a room looks, feels and functions, so the right fitting should be selected according to both appearance and practical req...

Commercial Office Cleaning: Combining Routine Office Cleaning With Melbourne Service

Keeping a workplace clean requires a service that can accommodate everyday tasks as well as the particular needs of the business. Professional comme...

Caravan Sales in Queensland: How to Find the Right Caravan for Sale QLD

Caravan ownership is about more than having somewhere to sleep while travelling. For many Queenslanders, it is one of the best ways to explore regio...

What Sir Walter Buffalo Turf Actually Costs in 2026 (And Why Quotes Vary So Much)

Two quotes landed on a Hills District homeowner's kitchen table last spring for the exact same 80-square-metre backyard. One said $12 a metre. The o...

Nearly 1,300 NSW Hospital Beds Are Occupied By People Who Are Ready To Go Home

1,276 people in NSW hospitals have been medically cleared for discharge but remain in hospital because they're still waiting for NDIS or aged care sup...

National Survey Launched to Measure Operational Impacts of Federal NDIS Policy Reforms

The effects of recent NDIS reforms are beginning to move beyond policy papers and into day to day service delivery. A new national survey is asking ...

Beyond the Nappy Cake: Baby Shower Gifts That Get Used

What new Australian parents unwrap, keep, and quietly thank you for months later. Six weeks after my daughter was born, I did an audit of the baby sh...

Parent-Advocates Are Reshaping Frontline Disability Service Delivery

Parents have always been part of the disability sector. They advocate, coordinate services, challenge decisions and often become the person holding ev...

Vista Cruises Enters "Two-Flagship Era" as Vista Aurora Completes Inaugural Voyage

Vista Aurora Sets Sail along the Yangtze. (Photo courtesy of the company)YICHANG, China — August 5, 2026 — Vista Aurora, a high-end interprovinc...

A Digital Preparation Checklist For International Medical Conferences

An international medical conference compresses many responsibilities into a few days. A delegate may need to present research, move between venues, ...

The Growing Popularity of Lab Grown Diamonds in Sydney and Hong Kong

The diamond industry has changed significantly in recent years as more buyers seek ethical, affordable, and sustainable alternatives to mined diamon...

Modern AI SEO Agency vs Traditional SEO: What’s the Difference

Search engine optimisation has changed dramatically over the past few years. Search engines have become smarter, user behaviour has evolved, and bus...

Caravan Travel for Modern Australian Getaways: Plan a Comfortable Holiday

A family road trip is one of the best ways to explore Australia together. And, travelling by caravan gives you the freedom to take your time, stop a...