ENERGY CONNECTED 2017/18 ANNUAL REVIEW - TRANSGRID
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Energy
Annual Review 2017/18
Connected
2017/18 Annual Review
transgrid.com.au
Annual Review 2017/18
transgrid.com.au 01
TransGrid is at the forefront of keeping
customers connected to the electricity
they use every day. The work we do quietly
improves the lives of millions – from lighting
schools, homes and streets, to powering
local businesses, hospitals and everything
in between.
Customers want the electricity network to be
reliable, affordable and sustainable. TransGrid
is working on innovative upgrades that will
protect and sustain communities and the
environment across Australia.
With a strong history of adapting to change,
TransGrid plays a central role in Australia’s
changing energy landscape - reshaping for
a bigger brighter future and delivering the
energy our community needs to thrive.
TransGrid
Annual Review 2017/18 02
Contents
WHO WE ARE 4
Chairman’s Message — 4
CEO’s Report — 6
Our Role — 8
Energy Connected — 10
Our Story — 12
Our Strategy — 14
OPERATIONAL EXCELLENCE 16
Contents
High Per forming — 16
Safety Culture — 18
Energy Transition — 20
Investing in Stability — 22
Encouraging Innovation — 24
CUSTOMER SERVICE 26
New Connections — 26
Telecommunications — 28
Customer Engagement — 30
Our Community — 32
Our Environment — 34
Network reliability
PERFORMANCE CULTURE
Our People — 36
36
99.
9999%
Our Board — 38
Our Leadership Team — 40
Key Indicator Review — 42
MW+
1,100
Renewable megawatts
connected since 2015
transgrid.com.au 03
Employee lost time
injury frequency rate
Highlights 4.3
Number of locations Staff located in five
across NSW regional areas
7 38 %
86 %
Number of community
members engaged Public safety campaign
in our business
582,000
TransGrid
project plans
Reputation score for
direct customers 34,000 Social reach
Non regulated revenue Regulated Capex Regulated asset base
growth invested in the
$ 6,371 M
2.1x
network in 2018
Up 2.1x on 2017
$ 230.8 M
Real price change
Transmission services
-5.2%
Revenue for 2017/18 as a proportion
of a typical NSW
$ 832.3 M electricity bill
Up 6% on 2017
3.4 % Compared to the
previous regulatory
period
Annual Review 2017/18 04
Who we are
Chairman’s
message
In an industry experiencing rapid change, TransGrid will
play a critical role in providing the platform for the
evolving energy market, by expanding our network
efficiently and developing new services to meet
changing needs.
Chairman’s message
The energy landscape has been The Australian Energy Market Direct and transparent interactions
reinvented since the formation of Operator’s (AEMO) Integrated System with our stakeholders will be crucial
the National Energy Market (NEM) Plan (ISP) currently provides the if we want to harness the full
less than 25 years ago. In this time clearest roadmap to show how our potential of this transformation.
industr y will adapt to the economic
TransGrid has honed what we do This document explores in detail
and technological developments
well whilst evolving with shaping energy systems across the complex interaction between
the industry. the world. NSW and TransGrid are TransGrid and our stakeholders,
firmly at the centre of Australia’s regulators and customers’, who as
We provide an essential ser vice of the 1st of July 2018 had a change
to the people of New South Wales energy future.
of manger at Utilities Trust
(NSW) delivering safe, reliable The ISP calls for significant Australia (UTA).
energy whilst making prudent transmission investment to
decisions to ensure investment respond to and underpin the Approved by TransGrid’s Board of
in the network benefits grow th of renewable energy in the Directors, this document is a record
our consumers. NEM. With at least three major ISP for our stakeholders and investors,
projects identified in TransGrid’s it captures the significant
Unsurprisingly, there are challenges achievements of TransGrid’s past
in the sector. While TransGrid network footprint, the oppor tunities
and responsibilities these present per formance and the great
unreser vedly respects the role of potential of our future.
regulators in the industr y, we find will be transformative not only for
ourselves in an environment which our business, but for the whole of
is continually shif ting and the NEM, and will deliver significant
demanding more from us as we seek benefits to end customers.
to deliver for consumers. There are
a number of proposals and
campaigns’ that could inhibit our TransGrid’s
abilit y to at tract and retain transformation
suf ficient investment capital to
suppor t the transmission network. under private
This limits the chances of Australia ownership continues.
fully benefiting from the capabilities
of the network as a plat form for
This is a strong
energy transformation in Australia. business with a
key role to play in
Australia’s energy
system.
transgrid.com.au 05
Jerry
Maycock
CHAIRMAN
TransGrid
Annual Review 2017/18 06
Who we are
CEO’S
report
There are many opportunities for TransGrid now and
into the future. While our future is bright, it is not
without challenges.
TransGrid CEO Paul Italiano In an environment where
answers questions on TransGrid’s energy affordability is the
performance in 2017/18, and top priority for regulators
discusses focus areas for and governments, how is
the future. Revenue from TransGrid factoring this
How would you describe non‑regulated into decision making?
CEO’s report
TransGrid’s performance business Our revenue for the nex t five year
119.2
in 2017/18? regulator y period will result in a
We have a lot to celebrate from the
past year, and we’ve exceeded our
$ M 5.2 per cent reduction in
transmission tarif fs across NSW
goals across ever y financial metric. and the ACT. We contribute
E xceptional results in project Up 2.1% on 2017 relatively lit tle to the average
deliver y drove revenue from our household energy bill, accounting
non-prescribed business totalling for around 1c/kWh which was just
$119.2 million, 6 per cent more than 3.4 per cent as a propor tion of a
our target. Our operational t ypical NSW electricit y bill in
expenditure is below budget as we 2017/18.
transform the business with bet ter What aspect of TransGrid’s On top of that, transmission prices
procurement outcomes, bet ter performance in 2017/18 has are actually lower than they were in
processes and technology 1995, adjusted for inflation, so I
innovation, while our Earnings disappointed you most and,
think we’re controlling our par t of
Before Interest, Tax , Depreciation what has pleased you most? consumer bills quite ef fectively.
and Amor tisation (EBITDA) for the Safet y remains a priorit y and we
period was $19.9 million above need to continue to focus and Outside of our direct action in
2016/17. improve in this area. We have put lowering tarif fs, as operator of
significant focus on safet y for the the NSW transmission network,
The business set a challenge for TransGrid has a big role to play
coming year and expect that to
itself to stay within one per cent of in facilitating competition by
translate to a stronger per formance
its prescribed capex target and we connecting new generation projects
in 2019.
delivered. While faced with delays to the energy system. We’ve
in transmission line projects we Successful determination of our demonstrated a great abilit y to get
compensated by bringing for ward 2018-2023 Revenue Proposal was new projects connected to the grid
planned investment in substations. an enormous achievement for the over the past years.
business. There are a lot of people
In the IT space we delivered
across the business who deser ve
$21 million wor th of projects on The energy market continues
credit for helping set TransGrid up
budget, enabling per formance and
to continue supplying safe, reliable to change at a rapid pace, and
transformation outcomes for the innovation and competition are
power to NSW and the Australian
coming year. driving this change. How is
Capital Territor y (ACT), enabling us
Our energy supplied per formance to continue investing in the network TransGrid ensuring its
was well ahead of our forecasts while lowering prices. strategic framework is still fit
and targets, reflecting strong for purpose in this rapidly
We also made great strides
management of the network to developing sector?
in developing TransGrid’s
deliver what consumers want:
Reconciliation Action Plan (R AP), There are many oppor tunities
reliable, safe electricit y.
a crucial par t of our focus on for TransGrid at the moment,
Overall this is a really strong set of diversit y and corporate and our future is bright but not
results from the business and a social responsibilit y. without challenges.
strong per formance of which we
can be proud.
transgrid.com.au 07
Paul
Italiano
CHIEF
EXECUTIVE
OFFICER
We’re operating in an environment ver y substantial ones in NSW which significant pipeline of network
where we need to redouble our will of fer oppor tunities for investment identified in the ISP,
ef for ts on safet y. We’ ll need to investment in the network to the at tractiveness of the sector for
continue delivering for our benefit consumers and reinforce investors remains a key concern.
customers in a newly contestable system securit y.
connection space, and we have On the project side, our business
regulator y reform driving down In the nex t couple of years – prior to has ramped up work on Powering
investment with significant flow 2020 – the ISP calls for small-scale Sydney’s Future, af ter regulator y
on ef fects for TransGrid. upgrades to connections between approval of a dual-stage project
NSW and Queensland (QLD) and with flexibilit y to expand the
In par ticular there are five areas between NSW and Victoria (VIC). infrastructure over time if required.
››Delivery
where we need to focus: This approach will minimise cost
In the early 2020s the ISP identifies impacts for consumers while
of safe and a need for a substantial upgrade to
reliable power ensuring a reliable energy supply
the QLD-NSW interconnector, for Sydney’s CBD.
remains at the core of what we do, significant transmission
and we need to keep doing this infrastructure associated with the
Can you sum up TransGrid’s
››
well ever y day. Snow y 2.0 project, and a new
Constantly improving connection between NSW and South future priorities?
our efficiency Australia (SA). Australia is undergoing a seismic
means continuing to invest in energy transformation, and in this
our transformation. Not just All of these developments are
rapidly evolving environment our
TransGrid
the specific transformation broadly suppor ted by contingent
project applications made in our company is positively contributing
initiatives run by our to the energy plan for future
Transformation team but 2018-2023 Revenue Proposal, which
will help us to achieve regulator y generations. A strong and
the broader per formance sustainable national energy system
transformation that goes along suppor t for any investment as
ef ficiently as possible. is the foundation for Australia’s
››means
with it. continued economic prosperit y.
Investing in customer benefit Overall, this forms a significant
pipeline of transmission work taking A well-managed transmission
identif ying the areas
place at the hear t of the NEM. This network is the plat form that can
across both our Prescribed and
work is helping the energy system enable Australia’s transition to
Non-Prescribed businesses where
adapt to the changing dynamics in cheaper, cleaner energy sources,
there are requirements to expand
the industr y, due to economics and and TransGrid has made great
our network and develop new
technology changing the way we strides to make this a realit y
ser vices, many of which are linked
generate, move and use energy. for consumers.
to the energy transformation
››Supporting
going on around us. Deliver y of safe and reliable power
regulation that What are the major remains at the core of what we do,
secures the future issues for TransGrid in the and we need to keep doing this well
means engaging in constructive ever y day.
next three to five years?
dialogue with the regulators who
govern our sector. Over the long There are a number of challenges
term we want to advocate for for us to navigate in the regulator y
and policy space as regulators and
››Leading
positive changes.
market bodies continue to focus on
the energy transition energy af fordabilit y in the absence
means seizing TransGrid’s of a national energy policy. EBITDA
19.9
oppor tunit y to act as an innovator
and thought leader in the The Draf t Rate of Return guideline M
changing industr y. recently published by the Australian
Energy Regulator (AER) represents a $
How are TransGrid’s significant change to the
medium‑term capital investment climate for network Increase on 2017
infrastructure. The proposed rate is
expenditure and investment driving Australian network
plans progressing? investment returns to some of the
The ISP released by AEMO identified lowest in the world and far behind
a range of ver y significant projects comparable jurisdictions in the UK,
across the NEM, and there are some US and New Zealand. With a
Annual Review 2017/18 08
Who we are
Our
role
Our role is to responsibly deliver safe and
reliable electricity around the clock now and
into the future, to over 3 million homes,
businesses and communities. Ours is the
TransGrid team behind the high voltage
network that energises NSW and the ACT.
We aim to create value for
Our role
societ y and our shareholders
from reinvesting in our
network, investing in grow th,
reliabilit y, cost ef fectiveness
and advocating for positive
regulator y reform. And now we
are looking to the future.
Gigawatt hours of
electricity moved
in 2018
70,381 GWh
13,093 MW
MW
Operational peak
demand in 2018transgrid.com.au 09
Generation
Wind Solar Hydro Gas and
Farm Farm Power Plant Coal-fired
Power Plant
Transmission
Substation
Direct Connect
Customers
Transmission
Substation
Transmission
TransGrid
Distribution
Substation
Distribution
Commercial &
Industrial Consumers
Residential ConsumersAnnual Review 2017/18 10
Who we are
Energy
connected
As manager and operator of the NSW high voltage
electricity network for the last 60 years, it is our
responsibility to keep you and your way of life
connected 24/7.
TransGrid is the backbone reduce from 74 per cent in 2016/17, businesses across NSW and the
Energy connected
of the NEM, which encompasses to 24 per cent in 2035/36. ACT. We operate 104 substations,
five interconnected regions: over 13,000 kilometres of high
AEMO also projects that wind and voltage transmission lines,
NSW, QLD, VIC, Tasmania (TAS) solar generation, which currently underground cables and three
and SA. NSW represents accounts for around 5 per cent of interconnections to QLD and VIC. We
32 per cent of Australia’s generation in the NEM, will need to suppor t a competitive wholesale
population, 34 per cent of energy connect up to 22 GW of new electricit y market which provides a
consumed in the NEM and is large-scale wind and solar level playing field for all
responsible for 33 per cent of generation before 2036. par ticipants; where the benefits
Australia’s economic output. The forecast retirement of existing flow through to consumers.
Australia’s first coal-fired coal generation, together with With transmission ser vices
generators were located in the significant reductions in the cost accounting for around 3 per cent of
cities distributing electricit y of new renewable generation, is the average electricit y bill, we
close to people’s homes. With the driving the transition to the energy recognize that the way we manage
development of transmission system of the future. We must be our business, and maintain the
capabilities, power stations agile in order to respond to the network, has a direct impact on
moved from cities closer to coal evolving energy landscape, and our customers ever y day. We take this
fields where they currently reside. abilit y to adapt to change is crucial responsibilit y seriously. As a
This improved living conditions, for continued success. provider of an essential ser vice, we
lowered cit y pollution levels and Our network is instrumental to the believe that customers should pay
saved significant costs. electricit y system and economy, no more than necessar y for their
and facilitates energy trading electricit y. With this in mind, we
By 2036, almost 70 per cent of are commit ted to delivering the
Australian’s coal-fired generators between Australia’s largest states.
We transpor t high voltage most ef ficient solution to meet
will be more than fif t y years old, your energy needs, both now and
most will be approaching electricit y from generators in NSW
and the NEM, supplying to more into the future.
decommissioning. The AEMO
projects that capacit y provided by than three million homes and
coal generation in the NEM will
AUSNET
TR ANSGRID POWERLINK SERVICES & AEMO ELECTR ANE T TASNE T WORKS
ENERGY DELIVERED 65,800 GWh 50,124 GWh 39,594 GWh 11,817 GWh 10,038 GWh
NE T WORK SIZE 13,000 km 15,500 km 6,600 km 5,600 km 3,500 km
PE AK DEMAND 13,093 MW 8,548 MW 7,980 MW 2,955 MW 1,964 MW
SUBSTATIONS 104 139 53 91 49transgrid.com.au 11
TRANSGRID’S
ELECTRICITY NETWORK Mudgeeraba
Bulli Creek
Directlink
Lismore
Casino
Dumaresq Tenterfield
Moree Sapphire White Koolkhan
Rock
Inverell Glen Innes
Narrabri Coffs Harbour
Dorrigo
Boambee South
Boggabri North Raleigh
Boggabri East Armidale
Nambucca
Macksville
Gunnedah
Tamworth 330
Silverton Tamworth 132 Kempsey
Port Macquarie
Broken Hill
Muswellbrook Herons Creek
Wollar Taree
Liddell
Beryl
Wellington Bayswater Stroud
Wellington Town Mudgee
Burrendong
Hawks Nest
Parkes Molong
Orange Mt Piper 132 INSET
North Ilford
Manildra Mt Piper 500
Buronga Forbes Orange
Wallerawang 132 & 330
Cowra Panorama
Griffith
Bannaby
Crookwell 2
Red Cliffs Balranald Darlington Point Yanco Murrumburrah Gullen Range Avon Dapto
Marulan
Wagga North Yass Kangaroo Valley
Coleambally Murrumbateman
Wagga 132 Burrinjuck
Uranquinty Capital Wind Farm
Tumut
Wagga South Gadara Queanbeyan
Deniliquin Canberra
Finley Morven Blowering Lower
Tumut
Jindera ANM Williamsdale
TransGrid
Upper Tumut
Hume
Murray Cooma
Albury Snowy Adit
Geehi
Wodonga
Munyang
Dederang Guthega Jindabyne
to Stroud
to Liddell Brandy Hill
OPERATING SYSTEM VOLTAGES to Bayswater
Tomago
500 kV Transmission Lines One Steel
Newcastle
330 kV Transmission Lines Waratah
West
220 kV Transmission Lines Eraring
132 kV Transmission Lines
330 kV Underground Cable Vales Point
Customer Exchange Point
Munmorah
Interstate Exchange Point
500 kV Substations Tuggerah
330 kV Substations
220 kV Substations
132 kV Substations
Mount Colah
Vineyard
Sydney
North
Mount Druit Sydney East
Regentville Sydney West
Rookwood
Road
Holroyd
Haymarket
Kemps
Creek Liverpool Sydney Beaconsfield West
to Wallerawang South
Ingleburn
to Bannaby Macarthur
to Avon to DaptoAnnual Review 2017/18 12
Who we are
Our
story
Since privatisation TransGrid has reinforced
its position as the market leading provider of
transmission, energy and communication
services in Australia.
TransGrid has achieved many
milestones over the past three
››Achieving world-class
efficiency:
As par t of our transformation
we are growing our non-regulated
years including: TransGrid’s per formance on business, which has more than
›› the global International doubled in size in the past year.
Our story
Investing in our network and TransGrid’s infrastructure
Transmission Operations and
delivering major projects: ser vices business has a pipeline
Maintenance Study showed
Since 2015, TransGrid has world‑class cost per formance in of more than 7,500 MW of new
invested $507.5 million in the 2017. TransGrid’s cost was well connection requests from
NSW/ACT transmission network, below peer averages across generator customers, a 30 per
including adding 233 kilometres Asia‑Pacific, Europe, Scandinavia cent increase on the previous
of new transmission lines and and Nor th America. TransGrid’s year. Our non-regulated
five new substations. We have cost per kilometre of transmission telecommunications business is
delivered 11 major capital works lines has fallen versus recent the six th largest fibre network in
projects to upgrade the network sur veys while maintaining strong Australia, and our reach into
or connect new customers operational per formance. regional areas of NSW allows
››Planning
including the Deer Park us to deliver internet and
substation, TransGrid’s first the future telecommunications ser vices to
major project in VIC. energy system: under-ser ved regional consumers
››Maintaining
reliability:
market-leading
TransGrid contributed ex tensively
and provided thought leadership
and businesses.
to help shape AEMO’s first
The energy system is changing ISP, a comprehensive blueprint for
with new intermit tent forms of the development of the national
generation, bat ter y storage, and energy market and the role of MW+
behind-the-meter energy systems
1,100
transmission in suppor ting it.
which all add complexit y to the
task of managing our energy
system in real time. Despite this
››Transforming our business:
TransGrid made significant
TransGrid has maintained an progress in transforming the
average network reliabilit y of business from a network planner Renewable
99.9999 per cent over the past and operator to a high per forming
three years. energy and infrastructure megawatts
››Securing future revenue at lower
cost to consumers:
ser vices company. This includes
building new capabilities and
connected since
2015
processes to ensure TransGrid is
TransGrid successfully concluded prepared to lead and thrive in the
the 2018-2023 AER Revenue energy system of the future.
Determination, securing our
revenue over the nex t five years
at a 5.2 per cent real price
reduction to consumers. Our
determination included approval
for the critical Powering Sydney’s
Future project, and provided
conditional approval for nine
major contingent projects.transgrid.com.au 13
11
Major network
projects (>$15m)
completed in last
two years 2017/18
TransGridAnnual Review 2017/18 14
Who we are
Our
strategy
TransGrid’s strategy is built
around our five core strategic themes.
Strategy Our Role
Our strategy
DELIVERING Maintaining a safe and reliable transmission system to
benefit the broader communit y is the core of TransGrid’s
1 SAFE, business. This includes continuing to meet our reliabilit y
targets and compliance obligations, and prudently managing
our network and assets. It also includes ensuring a safe
RELIABLE working environment for our staf f.
POWER
CONSTANTLY To continue to deliver for our communit y, employees and
shareholders, TransGrid must be ef ficient and highly capable
2
IMPROVING providing ser vices at the lowest cost.
TransGrid’s transformation program is delivering improved
OUR per formance across all capital projects and operations,
fostering changes needed to strengthen our high
EFFICIENCY per formance culture and invest in the capabilities of
our employees.
INVESTING IN The NSW transmission network will need ongoing investment
to meet changing customer needs and generation sources.
CUSTOMER
3
New assets, new ser vices and additional interconnection
between states will provide network capacit y, securit y and
reliabilit y, and will create a plat form for wholesale
BENEFIT competition that will lower costs to end customers. TransGrid
will actively pursue these oppor tunities where they hold clear
benefits for customers, or when they are a result of ex ternal
policy or regulation.
TransGrid will also continue to suppor t new connections in
NSW and actively work to ensure that we deliver responsive
and cost-ef fective design, project deliver y, and ongoing
ser vice to our generator customers.transgrid.com.au 15
Our five core strategic themes flow from the transition underway
in the nations energy system. They identify areas where there is
strong alignment between our role and the needs of consumers for
reliable, affordable and clean energy. Within each strategic theme
TransGrid
we see a role for TransGrid to create value for our business, for
consumers and for the broader energy market.
SUPPORTING The NEM will continue to evolve in the shor t and long term and
will impact fundamentally how TransGrid operates. TransGrid
4
REGUL ATION is taking a key role as a thought leader in the evolution of the
energy system, deploying our exper tise to ensure the best
outcomes for customers. This includes advocating for
THAT SECURES positions that are positive and benefit customers and the
NEM as a whole. Through our advocacy, we aim to help shape
THE FUTURE the NEM to provide bet ter economic incentives for
transmission projects that will benefit customers, as well as
incentives to identif y ef ficiency and suppor t innovation.
LEADING THE The transition to a new energy future is occurring now and
the pace of change and market outcomes are uncer tain.
5
TRANSITION TransGrid is leading the transition to a new energy system
and helping to manage the integration of new technologies,
such as renewable generation and storage, in a way
TO A NEW that achieves the best outcomes for customers and
market par ticipants.
ENERGY To achieve this, TransGrid’s technical exper tise will be
FUTURE deployed to deliver a system that meets consumers’ needs
for low-cost, reliable and low-emission power. Consumers
needs will be met in a system where transmission plays a
pivotal role in connecting new generation sources and
managing the operation of the system.Annual Review 2017/18 16
Operational excellence
High
performing
TransGrid is an efficient owner and operator of
assets, which puts safety first and delivers
world class reliability to consumers.
High performing
TransGrid is commit ted to responsible and
transparent investment in the modernisation of
critical infrastructure, ensuring our business
per formance is sustainable. We aim to meet
consumer expectations while providing
long‑term value for our shareholders.transgrid.com.au 17
Gigawatt hours of
electricity moved
in 2018
70,381 GWh
Peak operational Regulated Asset
demand in 2017/18 Base (RAB)
13,093 MW
$ 6, 371 M
Number of
Number of telecommunication
substations
104 132
towers (radio masts)
TransGrid
Reliability in 2018 Energy not supplied
0.25
Our network length
13, 133 KM
99.
9999% System minutes
Number of major
Optical Ground Wire projects completed
in 2018
9
(OPGW) in NSW
3,000 KMAnnual Review 2017/18 18
Operational excellence
Our
safety culture
The safety of employees, contractors
and consumers is our number one priority,
and it guides our actions every day.
TransGrid promotes a positive Employee lost time injury Electricity Network Safety
Our safety culture
safety culture in which all our frequency rate (LTIFR) is 4.3 Management System
employees and contractors are Whilst the LTI/LTIFR for 2018 was TransGrid’s Electrical
encouraged to actively manage higher than 2017, we continue Network Safet y Management
their own safety and the safety of overall on a downward trend over System is in place to meet the
others. Our safety vision and plan a 10 year period. TransGrid has expectations and requirements of
focuses on employee capabilities, moved to understand the severit y stakeholders, including:
risk culture and injury prevention.
To enable change we have focused
of the LTIs with the use of the
SafeWork NSW guidelines. In this ››The safet y of the public,
and persons near or working on
analysis we see a majorit y of
on instilling a safet y culture our LTIs are of a minor nature. electricit y transmission
››
throughout the business network assets
leadership, systems and We ensure our assets are The protection of proper t y and
technology, learning and coaching, maintained and operating safely,
››
network assets
and knowledge sharing. by following strict guidelines and
implementing robust processes to Safet y aspects arising from the
Our achievements include: protection of the environment,
››Introducing
protect the safet y of employees
and consumers. We also engage including protection from ignition
the Heads Up safet y
››
with contractors and the relevant of fires by network assets
conversations to increase the
authorities to safely manage works Safet y aspects arising from the
leadership presence in the field,
in and around our assets. loss of electricit y supply.
and assist in unlocking an open
dialogue around safet y risk
››Utilizing technology – 85 per cent
of all easements and access
Public Electrical Safety
Awareness Plan
tracks have been mapped and are We have developed a Public
available for our workers’ to view Electrical Safet y Awareness Plan
and assist in the planning of work (PESA), in accordance with the
››Implementing the mobile plant
framework – ensuring mobile
requirements of the Electricit y
Supply (Safet y and Network
Management) Regulation 2014, to
plant compliance via an ef ficient outline the management of our
and easy to understand app
››Collaborating
network assets in relation to
with our public safet y.
construction forums, sharing The objective of the PESA Plan is to
experiences and ideas aiding provide information to the public
bet ter understanding of industr y regarding the hazards associated
best practice. with electricit y, in par ticular high
voltage transmission lines and
substations owned and/or operated
by TransGrid.transgrid.com.au 19
4.3
Employee lost time
injury frequency
rate
We are all
empowered and
inspired to step up,
take action and
be responsible for
safety.
TransGridAnnual Review 2017/18 20
Operational excellence
Energy
transition
Energy transition is accelerating - creating
new challenges and opportunities
for the transmission network.
TransGrid has seen unprecedented
levels of generator connection
TransGrid actively collaborates
with a wide range of stakeholders
››Aintermit
higher propor tion of
tent generation
Energy transition
enquiries in the past year. in preparing for the energy system facilitated by greater
The withdrawal of traditional of the future. During 2018 we interregional transmission
suppor ted AEMO’s ISP, with capacit y and large-scale
sources of baseload generation
››
technical input to its energy storage
and the influx of renewable energy modelling of supply solutions.
sources means the supply-demand New connections to areas with
abundant resources and large-
balance is tightening. At the same
Network Investment
››
scale renewable generation
time, energy throughput and peak
demand across TransGrid’s network TransGrid delivers value to New ancillar y ser vices to manage
››
consumers and its shareholders system stabilit y
have risen for the past four years.
by managing its assets in a A changed regulator y framework
Transmission plays a pivotal role in sustainable and responsible to be managed to suppor t the
this changing energy landscape. manner. Value is delivered through:
››Ensuring
energy system of the future.
Consumers and businesses
safe and reliable TransGrid’s network investments
demand electricit y supply that is
››Continual
operation of the network aim to prepare for these
sustainable, af fordable and reliable,
modernisation of developments.
and the transmission network is a
key enabler to meet demand. assets and a commitment to low
››Infacilitated
the past three years we have
the connection of over
cost solutions, ensuring future
network improvements are in the
best interest of consumers.
Reliability
The existing reliabilit y standard
1,000 MW of renewable generation is a per formance standard,
to the network, and have managed measured by the amount of energy
Investments in the network not supplied versus energy supplied
the integration of higher levels of
take the form of:
››Asset
intermit tent generation without over one financial year.
replacements and upgrades
››
destabilising the grid In 2017/18 TransGrid’s network
to maintain the safe and reliable reliabilit y continued to exceed
By facilitating connection of
››Network
operation of the existing network 99.9999 per cent. This high rate of
renewable energy sources, we
increase the level of competition augmentations to provide reliabilit y is largely due to the
amongst the generators in the new network capacit y, either to excellence of our operational
wholesale market. This results meet rising demand, or to suppor t planning exper tise, mature systems
in lower wholesale prices, new connections. and experienced work force.
providing a positive net benefit Transmission is key to the A new planning standard will take
››
for the consumers energy transition within the NEM. ef fect from 2018/19.
We deliver reliabilit y by actively Key changes expected in the
balancing supply and demand in energy market over coming
years include:
››Increased
the operation of the network.
TransGrid provides essential interconnection
system stabilit y ser vices, between states, with NSW
and many of our line and continuing as the centre of
substation upgrades are focused the NEM
on improving the flow of energy
between regions to create a more
stable, interconnected grid.transgrid.com.au 21
NETWORK RELIABILITY (SYSTEM MINUTES L0ST)
0.25 42%
SYSTEM MINUTES LOST HAS DECREASED BY 0.18 SINCE LAST YEAR
A system minute is the amount of energy which would not
be supplied if the whole NSW system was unavailable for
a minute at peak usage.
NUMBER OF OUTAGES (where energy not supplied exceeded 12 MWh)
1
2017/18 In 2017/18
TransGrid’s
3 transmission
2016/17
network reliability
4 continued to
2015/16
exceed 99.9999%
1
2014/15
TransGridAnnual Review 2017/18 22
Operational excellence
Investing in
stability
TransGrid employs a robust Network Capital
Investment Framework to justify and prioritise
decisions to invest in assets.
Investing in stability
This framework is used by TransGrid TransGrid is working to
to identify, deliver, realise and facilitate the process of actively
maximise the benefits from facilitating the connection of over
investments in assets, and is 1000 MW of new generation in
coming years. An unprecedented
applied to the full asset lifecycle
volume of generation enquiries
including project planning, have been processed, with
delivery, finalisation, maintenance approximately 40,000 MW of
and disposal. potential solar, wind and hydro
The framework aims to deliver value projects at various stages of
to TransGrid’s customers, reduce development. Although many of
risk to consumers and employees, these enquiries are seeking to
and protect the environment around connect to remote locations, where
operating assets. the existing network capacit y is
limited, we are working closely with
In 2018 TransGrid completed project proponents to ensure a
projects valued at $175 million in positive outcome.
investments in our regulated
transmission network under the
framework, including seven
projects that were energised in
2018 (page 23).
We completed our first
major interstate project
through the installation of
40,000 MW Deer Park 220/66 kV
terminal station in
Of potential Ravenhall, VIC 22 km west
solar, wind and of Melbourne CBD. This
hydro projects at site will be operated and
various stages of maintained by TransGrid
development for 30 years.transgrid.com.au 23
CAPITAL DELIVERY PROGRAMS
9
5
8 13
4
NSW 10 2
1
11
3
12
ACT
6
TransGrid
7
VIC
PROJECT LOCATION PURPOSE STATUS
1 Sydney Nor th Secondar y System Replacement Central Nor th Asset Replacement for end of life condition Energised
2 Vales Point 330 kV Substation Rebuild Nor th Asset Replacement for end of life condition Energised
3 Wagga 132 kV Substation Condition South Asset Replacement for end of life condition Energised
Taree 132 kV Substation Secondar y Systems
4 Nor th Asset Replacement for end of life condition Energised
Replacement
Transmission Line 96H (Cof fs Harbour to
5 Nor th Asset Replacement for end of life condition Energised
Koolkhan) Wood Pole Condition
Transmission Line 97K (Cooma to Munyang)
6 South Asset Replacement for end of life condition Energised
Rehabilitation
7 Deer Park 220/66 kV Sub Establishment South Customer request Energised
8 Silver ton Wind Farm Connection South Customer request Energised
9 Sapphire Wind Farm Connection Nor th Customer request Energised
10 Orange 132 kV Substation Rebuild Central West Asset Replacement for end of life condition Energised
11 Nor th Ring- OPGW Por t Macquarie to Stroud Nor th Asset Replacement for end of life condition Energised
Completion due
12 Beaconsfield Redevelopment Stage 2 Sydney CBD Asset Replacement for end of life condition
in December 2018
Transmission Line 99F (Uranquinty to Yanco) Completion due
13 South Asset Replacement for end of life condition
Pole Replacement in December 2018Annual Review 2017/18 24
Operational excellence
Encouraging
innovation
TransGrid encourages innovation in engineering,
fosters knowledge sharing and supports research
across our industry, to address the challenges of
the future.
Encouraging innovation
The energy industry is in a time of
transformation. Flexible and DRIVING Embracing data and digital to
drive efficiency
scalable, the grid enables us to
accommodate more sustainable INNOVATION IN We are deploying digital
technologies to reduce costs
solutions as they become more
accessible. As the supply side of THE NETWORK and improve ef ficiency across
our network.
Australia’s electricity market
changes, we are able to adapt and ››Harnessing data and analytics
TransGrid’s network generates
provide transmission network
services to a broader range ENHANCING THE over 36 million real time data
points each year on the
of customers. per formance of our network, as
An impor tant par t of our planning SAFETY OF OUR well as, five million data points on
the operating condition of our
and development is to provide
connections for proposed new OPERATIONS assets. Our Asset Management
team uses ‘big data’ analy tics to
generators, including from the
harness these data streams to
renewable energy sector. We are
improve our network reliabilit y,
constantly looking for new and
boost ef ficiency of our
innovative ways to overcome
challenges that may arise. We INVESTING IN operations, prioritise investments,
and adopt more accurate
do this by working innovatively,
TECHNICAL
››Substation
condition-based maintenance.
working together and
working smar ter. goes digital
INNOVATION We recently completed the
installation of a cut ting edge
IEC-61850 Digital Substation at
our Avon 330 kV substation,
located 100 kilometres south of
PROTECTING THE Sydney. Digital substations
enhance the control and
ENVIRONMENT protection of power transmission.
TransGrid par tnered with leading
global technology companies to
deploy this design in Australia.
The digital technology results in
smaller and fewer components in
the substation which reduces
cost and complexit y, as well as
reducing the size of the building
required to accommodate the
systems by up to 80 per cent.transgrid.com.au 25
Doing more with less interconnectors, connection of In June 2018, Paul
TransGrid is deploying innovative new generation without major Italiano and Lord Mayor
approaches and technologies that network modifications,
and reduced cost when compared - Councillor Clover
allow us to get more output from Moore unveiled the first
our existing network, reducing the with other solutions.
industrial-scale Tesla
need to invest in new transmission
assets to meet growing customer Preparing for the grid of Powerpack battery which
needs. E xamples include: the future was installed and in
››Dynamic
TransGrid
Our future energy system will operation in the Sydney
line ratings involve higher propor tions of metropolitan area.
TransGrid is deploying new on-line
variable renewable generation,
technology to determine maximum
making it critical for networks
power transmission line operating
to have resources in place to
conditions, and to determine the
manage greater peaks and
maximum power carr ying capacit y
troughs in output.
under prevailing conditions in
E xamples include:
››Battery
real-time. This allows bet ter
utilisation of the capacit y of the
existing lines: for example, on a
storage trials
Bat teries are widely viewed as ››Generator runback schemes
We have provided innovative
windy day the lines will be rated being able to provide many solutions for generator
higher, allowing the lines to carr y dif ferent ser vices to the grid and connections by leveraging
more electrical power from wind consumers including storing peak runback schemes, removing
generators. It also provides a energy for use later. The vast the need for more costly
bet ter approach for managing majorit y of the bat ter y storage network augmentations.
the risks associated with capacit y installed in Australia is Runback schemes allow a
unintentional overloading of the located behind the meter, and is generator to produce its rated
transmission lines, under distributed. Our challenge is to output at system normal
unfavourable weather conditions. have visibilit y of these resources, conditions and at reduced
TransGrid completed installation and manage them securely generation in contingency events.
of dynamic line ratings for over 20 within the grid. We recently This is especially useful in weaker
transmission lines in NSW by the commissioned an aggregated par ts of the network where a
end of 2017, with plans to roll out 1.5 MWh of bat ter y energy storage significant number of generators
additional lines over the nex t capacit y across three sites in are looking to connect,
››Smart
five years. par tnership with The Cit y of allowing bet ter utilisation
Wires Sydney Council, The Universit y of of network capacit y.
We are trialling a new way to New South Wales and Woolwor ths.
reduce network constraints The trial gives us the abilit y to
through innovative and modular dispatch distributed bat teries for
technology. Smar t Wires is a new demand management during
technology which dynamically network constraints, and allows
controls power flows on our par tners to schedule the
transmission lines to help remove bat ter y for day-to-day
transmission constraints on the operations.
network. Benefits include larger
power transfer capacit y alongAnnual Review 2017/18 26
Customer service
New
connections
Since 2015, TransGrid has facilitated the connection of
over 1,100 MW+ of renewable generation to the
network, including Sapphire Wind Farm, Silverton Wind
Farm, Griffith Solar Farm, Parkes Solar Farm, Crookwell
II Wind Farm, White Rock Wind Farm and Bodangora
Wind Farm.
New connections
TransGrid responded to over
46,303 MW of new connection
Customer Story: ››TransGrid provided a value for
money solution and immense
The 200 MW Silver ton Wind Farm
enquiries this financial year. benefits, including our abilit y to
project is a $450 million
We are supporting contestable build, own, operate, and maintain
development owned by Par tnering
a high voltage electrical asset,
connections and infrastructure Australian Renewables Fund (PARF),
connected to the wind farm
services in VIC, SA and QLD, with a par tnership set up by AGL and QIC.
››
project
over 1,000 MW of new generation TransGrid par tnered with PARF to
build, own, operate and maintain The wind farm commenced
projects supporting private
the high voltage infrastructure that generating on 14 May 2018,
industry demand and the Victorian and will power approximately
enables the project to connect to
Renewable Energy Target. the transmission network. 136,000 average Australian
››This was the first time AGL had
engaged a Transmission Network
homes. It will ultimately produce
around 780,000 MWh of energy
annually.
Ser vice Provider to deliver
contestable connection ser vices
for a new generator development
NEW CUSTOMER CONNECTIONS
NEW GENERATION NEW GENERATION NEW GENERATION
CONNECTIONS CONNECTIONS MOVING TO CONNECTIONS UNDER
UNDER COMMISSIONING CONSTRUCTION IN FY19/20 DEVELOPMENT
4 1 4
WIND WIND WIND
FARMS FARM FARMS
700 MW
capacit y
4 8 18
SOL AR SOL AR
FARMS FARMS
SOL AR
FARMS
100 MW Total over 1,000 MW+ new Total over 4,300 MW new
capacit y generation capacit y generation capacit ytransgrid.com.au 27
WHAT OUR CUSTOMERS SAY
Global Power, Neoen Total Eren
Generation Australia TransGrid worked proactively with TransGrid’s abilit y to work
Global Power Generation Australia Neoen to connect the Parkes, collaboratively and in par tnership
appreciate the collaborative spirit Grif fith and Coleambally Solar Farm with Total Eren helped our business
from the TransGrid team, enabling projects. TransGrid’s integrated develop a unique proposition with
the Crook well II Windfarm project to approach and high level of Kiamal Solar Farm. We look for ward
become a successful and record- responsiveness, allowed us to to building VIC ’s largest solar farm
low price NSW wind farm. TransGrid focus on project development and with TransGrid.
took the time to fully understand assisted us to manage our time
more ef ficiently. Neoen was Kam Ho
our needs as a wind farm proponent Head - Origination & Development
and operator, and they set the right satisfied with TransGrid’s qualit y
and dedicated customer ser vice. Asia-Pacific Region - Total Eren
foundation for a timely and cost-
ef fective deliver y of a significant Chris Leonard
piece of grid connection Head of Solar Development - Neoen
infrastructure.
Guillermo Alonso Castro
Engineering Manager - Global Power
450
Generation Australia
$ M
200 MW Silverton
Wind Farm project
TransGrid
PRO JECT LOCATION TECHNOLOGY STAT US
BROKEN HIL L Broken Hills, NSW Solar Connected in 2015
WHITE ROCK Spring Mountain, NSW Wind Connected in 2016
PARKES Parkes, NSW Solar Connected in 2016
GRIFFITHS Griffiths, NSW Solar Connected in 2016
SAPPHIRE Kingsland, NSW Wind Connected in 2016
SILVERTON Silverton, NSW Wind Connected in 2017
NEW LOAD
CONNECTIONS UNDER BODANGOR A Bodangora, NSW Wind Connected in 2017
DEVELOPMENT
CROOK WEL L Roslyn, NSW Wind Connected in 2017
1000 MW COL E AMBAL LY Coleambally, NSW Solar Connected in 2017
BERYL Gulgong, NSW Solar Under construction due April 2019
ME T Z Armidale, NSW Solar Under construction due June 2019
Suppor ting new critical
S tate, Federal and CRUDINE RIDGE Illford, NSW Wind Under construction due July 2019
privately funded KIAMAL Ouyen, VIC Solar Committed project due March 2019
infrastructure
SUNR AYSIA Balranald, NSW Solar Committed project due December 2019
L IMONDAL E 1 AND 2 Balranald, NSW Solar Committed project due February 2020Annual Review 2017/18 28
Customer service
Telecommunications
business
With more than 15 years’ experience TransGrid
Telecommunications is a market leader, managing an
extensive fibre optic network covering in excess of
4000 kilometres across NSW, the ACT and VIC.
Telecommunications business
Our telecommunications assets Our business focus is to continually Several sales initiatives have
and infrastructure have been built improve on customer engagement already been implemented and
to support TransGrid’s high voltage and satisfaction, generating steady successes achieved:
electricity network, which meets
the strictest reliability standards
grow th in revenue, strategic
planning and innovation through a ››100 Gbps Sydney to Melbourne
››100
series of initiatives including: ser vice for Optus
››Implementing
in the country. Gbps network solution
a Carrier Grade for TPG.
As an independent Metro Ethernet Forum
Telecommunications TransGrid Telecommunications were
››
designed network
Infrastructure Par tner, our aim recently selected by the NSW
is to maximise our competitive Upgrading the Network Government as a member of the
››
advantage, leveraging TransGrid’s Management System five-year Telecommunications
existing infrastructure. TransGrid’s Significantly growing the Purchasing Arrangements panel.
“Fibre in the Sk y” is a network of business with the NSW The appointment being a significant
››
optic fibre that runs along 24,000 of Government sector milestone and a vote of confidence
our towers, combined with a Increasing network coverage into in our 4,000 kilometres ‘Fibre in
comprehensive microwave network QLD, and fur ther expanding our the Sk y’ network. We also recently
known for its reliabilit y and connected with the NBN, increasing
››
reach into rural and regional NSW
securit y. This enables TransGrid’s our coverage, connectivity and sales.
Telecommunications the diversit y E xpanding the product por t folio,
and scale to successfully meet for example: Data Centre Connect,
customers’ needs. Facilities as a Ser vice, Internet of
Things, and Sof tware-Defined
››
TransGrid’s co-location business Wide-Area Network
of fers ser vices to Telstra, Targeting high value long term
Vodafone, Optus and NSW
››
revenue oppor tunities
emergency ser vices, facilitating
the deployment of wireless Collaborating with the
networks by leasing space for the Infrastructure Connections
installation of customers: team and its renewable
››Antennae
energy customers.
››Microwave dishes
››Panel antennae Number of
››Rack space within our telecommunication
towers (radio masts)
››Ground
132
buildings; or
Space for
customer shelters.transgrid.com.au 29
TransGridAnnual Review 2017/18 30
Customer service
Customer
engagement
TransGrid’s success depends on its ability to engage
and better understand our customer needs and
expectations. We are focused on creating a seamless
service experience.
Customer engagement
TransGrid works with a diverse We do this by: ››Building high levels of trust
set of stakeholders including
energy consumers, directly ››Allocating a dedicated customer
manager to any customer directly
by suppor ting our customers
throughout the enormous
connected customers, changes faced by the
connected to TransGrid’s network, energy industr y.
local communities, regulators, providing customer advocacy,
state governments and the understanding and deliver y on In 2017/18, TransGrid achieved a
››
Federal Government. customer needs 86 per cent reputation score for our
Facilitating engagement between direct customers, according to an
Engagement methods key industr y stakeholders and ex ternal audit by Newgate Australia,
TransGrid customer and stakeholder TransGrid’s senior leaders through maintaining a positive trend in
managers build strong relationships the TransGrid Advisor y Council, the last several years.
through frequent engagement set up in 2016 to act as a key Our goal is to consistently deliver
across multiple touch points, advisor to the business, t ypically the highest Net Advocacy Score of
including operations, technical,
››
meeting four times a year Australian energy businesses and
planning, projects, and commercial
Developing an open and reliable achieve top-quar tile stakeholder
as well as communit y engagement.
channel of communications engagement scores.
between TransGrid and its
customers, providing invaluable
access should there be a
customer issue that needs to
be resolved quickly
86 95
We provide operational
% % support to generators
and direct connect
customers, including
24/7 support from
our skilled field force
Reputation score for Trust score for located throughout
direct customers direct customers NSW.transgrid.com.au 31
TransGrid
WHAT OUR CUSTOMERS SAY
Tomago Aluminium Delta Electricity – Simon Bolt
We really appreciate our strong (Technical Manager)
relationship with TransGrid, Over several years, TransGrid has
whose customer engagement successfully worked with Delta
team consistently provide great Electricit y to ef fectively carr y out
suppor t. In early 2018 the TransGrid planned upgrades to the Vales Point
team were on hand to assist Tomago Power Station Facilit y, including on
with CT and circuit breaker high voltage electrical
replacements, their quick work infrastructure assets operated by
allowed us time to set up the main TransGrid. The projects have been
regulator transformers. necessar y to improve reliabilit y on
TransGrid was on hand when ageing equipment. The TransGrid
needed, reliably provided the team worked with Delta Electricit y
collaborative suppor t required by to understand and deliver ef fective
Tomago business operations. We planning processes, successfully
look for ward to working together in managing generator outages, and
the future. minimising the impacts and
disruptions to Vales
Point operations.Annual Review 2017/18 32
Customer service
Our
community
TransGrid cares about the communities we work and
live in. We support initiatives that deliver lasting
benefits. Through our Community Partnerships
Program we actively contribute to areas where our
infrastructure is located, and where we are
undertaking network upgrades.
Our community
BeSafeKids
BeSafeKids is a program that educates
children about electrical safety.
The program is designed to inform
youngsters about the impor tance of safety
around common electrical items and
TransGrid’s assets. BeSafeKids is targeted
at communities where we are actively
working or have assets nearby.
BeSafeKids covers a range of areas
including:
››Staying safe around TransGrid’s assets
››History of electricity
››Brief overview of TransGrid, including our
commitment to the environment.
The BeSafeKids program is free, and can
be presented to individual classrooms or
the whole school.transgrid.com.au 33
OVER THE L AST YEAR, WE HAVE FUNDED A NUMBER OF
COMMUNITY INITIATIVES INCLUDING:
MULGOA VALLEY To assist with the management of weeds and improve biodiversit y in the Mulgoa
L AND CARE GROUP Creek corridor. The commitment to this land for conser vation is vital as it
provides habitat and suppor ts safe movements for wildlife including wombats
and several bird species.
MOUNT ANNAN To suppor t the purchase of STEM focused resources to ex tend students abilit y to
CHRISTIAN COLLEGE understand scientific and engineering principles through the use of Robotics and
Circuitr y work.
2018 REGIONAL Sponsoring the Leadership Award to acknowledge, encourage and reward the
ACHIEVEMENT & valuable contribution businesses, groups, organisations and individuals make
throughout regional and rural NSW and ACT.
COMMUNIT Y AWARDS
TAMWORTH Sponsoring a new ar twork acquisition for the Galler y based on the Cit y of Light to
REGIONAL GALLERY celebrate the 130th anniversar y of Tamwor th being the first town in Australia to
have municipal electric street lights.
YASS VALLEY COUNCIL Suppor ting the local communit y to protect and preser ve Aboriginal histor y
through an interpretative display by Yass Valley Council, featuring three
Aboriginal Scarred Trees at Oak Hill Aboriginal Place in Yass.
NATIONAL HEART To assist with funding for the Nimmitabel Public School in the Snow y Region’s
FOUNDATION Jump Rope for Hear t outreach skipping program. This program enables students
to learn healthy behaviours and habits, to lead active, healthy lives, and learn
TransGrid
skills to protect their hear t health.
YASS PUBLIC SCHOOL Suppor ting academic achievements through a sponsorship prize.
YASS HIGH SCHOOL Suppor ting academic achievements in math and science through
sponsorship prizes.
BERINBA PUBLIC Suppor ting academic achievements through a sponsorship prize.
SCHOOL
TransGrid is committed
to helping build positive
relationships with
our communities and
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