A GIANT $217 million upgrade of the power grid in the New England has been approved.
The announcement was made by the regulator on Tuesday morning and the project is set to immediately create 150 jobs in the wider Tamworth area.
Proponent TransGrid has set itself an ambitious completion date for the mega-project, set to be switched on by the third quarter of next year.
The scheme is primarily designed to increase the capacity of the Queensland-NSW interconnector, which allows for transfer of energy between the two states.
But it will also mean an increase in local capacity in the New England region, TransGrid CEO Paul Italiano told the Leader.
That will probably mean even more jobs in additional big renewable energy projects in the future, he said.
"There's no doubt that the New England region is highly prospective for renewable energy," he said.
"It's got good elevation, it's got good wind, it's got good solar radiation.
"We will be seeing coal fire power stations gradually withdraw from the market over the next 10 to 15 years starting with the high profile one, Liddell."
Construction has actually already started on the project, with state and federal joint signing off fast tracking early works.
Mr Italiano said the work is largely on land they already own or have access rights to, which will speed up approvals.
With Tuesday's formal approval of the interconnector upgrade by the Australian Energy Regulator, on-site construction is expected to start next month. They will start by upgrading towers, but will also upgrade sub-stations in Tamworth, Armidale and Dumaresq.
With the gradual closure of generation in the Hunter Valley, power will need to be produced elsewhere. The $217 million project should "on paper" make the New England a more attractive place to do that, Mr Italiano said.
But actually building the multi-million dollar upgrade will be a "huge" effort, he said.
COVID-19 PANDEMIC ADDS TO TIMELINE
The project deadline, September 2021, would ordinarily be a difficult stretch. But with the global COVID-19 pandemic adding stress to international trade, the job is going to be harder than ever.
Much of the high-tech technology to be included in the upgrade, including cutting-edge static volt amp reactive compensators, are not made in Australia and will have to be imported.
"COVID has the potential to disrupt the supply chain in any way you can dream of," Mr Italiano said.
"You may get the factory close down, you may get supplies of critical components to that factory close down.
"You've got to be able to put it on a ship, you've got to get the ship into Australia, you've got to get it through a port here.
"If any one of those gets massively disrupted by COVID then the delivery is quite compromised.
"We have to look at really innovative alternatives."
The project is expected to provide net benefits of $170 million to electricity customers alone.
One benefit will be cheaper power prices, Mr Italiano said.
Queenslanders paid an average electricity wholesale price of just $65 compared with the $81 price in NSW so far this year.
With a bigger "pipe", more cheaper power from the Sunshine State can be pumped southwards, driving down NSW prices, Mr Italiano said.