Australians in South Australia and New South Wales could see downward pressure on their electricity bills and improved grid stability following the recent energisation of Project EnergyConnect. The massive $3.6 billion interconnector, a crucial element of the National Electricity Market (NEM), reached a significant milestone this week with Transgrid confirming the initial energisation and completion of construction for its NSW section on August 26, 2026.
This development marks a pivotal step towards the full operational status of the 900-kilometre transmission link, which connects the power grids of South Australia, New South Wales, and includes a connection to Victoria. The project, a joint effort between Transgrid in NSW and ElectraNet in SA, is designed to facilitate greater renewable energy sharing and enhance the reliability of the national grid.
A Decade in the Making: Project EnergyConnect’s Journey
Project EnergyConnect has been a complex undertaking, facing numerous challenges including global supply chain disruptions, labour shortages, and inflationary pressures. These factors have seen the total estimated cost for the project escalate from an initial forecast of approximately AUD $2.1 billion to $2.3 billion to its current figure of around AUD $3.6 billion for Transgrid’s share, with overall project costs exceeding $4 billion in some estimates.
Despite these hurdles, Transgrid Group CEO Brett Redman emphasised the long-term benefits for consumers. Redman stated that independent modelling forecasts Project EnergyConnect will deliver approximately AUD $964 million in net benefits, even after accounting for the increased delivery costs. These benefits are expected to materialise through reduced wholesale electricity prices, which constitute the largest component of household energy bills, as more lower-cost renewable energy can be integrated into the grid.
“This critical interconnector has not been easy to deliver,” Transgrid CEO Brett Redman remarked, acknowledging the cost escalations. “Every additional dollar matters to consumers. But now the full route is connected, it will start to reduce constraints, improve resilience, and over time, support lower-cost energy.”
Boosting Capacity and Renewable Integration
Once fully commissioned, Project EnergyConnect will boast a substantial 800 MW of transfer capacity between New South Wales and South Australia, with a spur line extending to Red Cliffs in Victoria. This increased capacity is vital for Australia’s energy transition, enabling more than 2 GW of new solar, wind, and battery storage projects to connect to the National Electricity Market.
The South Australian section of the project, delivered by ElectraNet, was completed in December 2023 and became operational last year, providing an initial 150 MW bi-directional capacity between Robertstown and Buronga. The recent energisation pertains to the larger NSW section, a 700-kilometre network of transmission lines from Wagga Wagga to the South Australian border, with the Victorian spur.
This enhanced inter-state connection is crucial for grid stability, particularly as coal-fired power stations progressively retire across the NEM. By allowing excess renewable energy from one state to be dispatched to another, the interconnector helps balance supply and demand, reducing the reliance on more expensive, fossil-fuel-based generation during peak periods. This also supports the growth of initiatives like Virtual Power Plants (VPPs) which contribute to grid stability by coordinating distributed energy resources. For more on how you can participate and benefit, see our guide on Join a VPP in 2026: Earn Up To $1,500 Annually & Boost Grid Stability.
What’s Next for Project EnergyConnect?
While construction and initial energisation are complete, the Australian Energy Market Operator (AEMO) is scheduled to commence inter-network testing later in 2026. This critical phase will verify the reliability and performance of the new infrastructure, ensuring it meets the stringent operational requirements of the NEM. Full integration and release of the entire 800 MW capacity is anticipated by the end of 2026, with full operational status for Stage Two pushed back to July 2027.
The project is considered a cornerstone of Australia’s clean energy future, helping South Australia move closer to its target of 100 per cent net renewables by 2030 and supporting NSW in phasing out its remaining coal-fired generators. As the grid continues its transformation, such large-scale transmission projects are indispensable for delivering a more secure, reliable, and affordable energy supply to Australian households and businesses.