Western Outer Ring Main Project
R2A completed a review of the security of supply of the Victorian Transmission System (VTS) in early 2012.
R2A were commissioned by the APA Group to complete a review of the security of supply of the Victorian Transmission System (VTS) with particular regard to the economic benefits to existing and long-term customers of the proposed Western Outer Ring Main (WORM) Project in Victoria for submission to the Australian Energy Regulator (AER), the national energy market regulator.
The report concludes that in the event of a supply failure as occurred at Longford in 1998, the WORM Project would:
- Provides major benefits in the shoulder seasons (spring and autumn) to all existing customers, and
- Substantially reduces a winter disruption particularly to domestic customers and essential services, if industrial and commercial loads are dropped off.
Additionally, the WORM Project is a vital element to support an augmentation of the supply transmission capacity to the Victorian gas market, facilitating long-term market expansion benefits.
For a 5, 10 and 15-day duration interruption over a 60 year pipeline life, this amounts to a potential avoidance of $46.0m, $77.7m and $105.8m respectively. Longer events such as that experienced in the last Longford explosion would result in significantly higher benefits.
For a WORM net project capital value of $39.4 m, this suggests the WORM Project achieves a payback over the 60-year pipeline life for any one event exceeding about 5 days.
Transparency in decision-making in complex technological enterprises is often difficult. Requests for greater system, plant or network reliability for essential services is often seen as ‘gold plating’ by financial markets and shareholders, and yet the failure to have sufficient redundancy can result in the catastrophic loss of shareholder funds and community devastation.
The R2A operational due diligence methodology provides decision makers from Board to Line Management with relevant information to make complex decisions.