www.electranet.com.au

Slide 1

Munno Para Substation and the role of ElectraNet

Accessing Mining and Major Projects 2012May 2012

ElectraNet Slide 2

Presentation Outline

Industry Structure and the Role of ElectraNet

New Generation and Network Development

Munno Para

www.electranet.com.au

Slide 3

Industry Structure and Overview

ElectraNet Slide 4

About ElectraNet Private Transmission Infrastructure Company

Principal Transmission Network Service Provider (TNSP) in SA

ElectraNet owns and manages the SA transmission system in the National Electricity Market (NEM)

Comprises about 6,000 circuit kilometres of transmission line

88 substations

Asset value around $1.9bn

Turnover >$300m pa

Employs over 270 staff

Private Transmission Infrastructure Company

Principal Transmission Network Service Provider (TNSP) in SA

ElectraNet owns and manages the SA transmission system in the National Electricity Market (NEM)

Comprises about 6,000 circuit kilometres of transmission line

88 substations

Asset value around $1.9bn

Turnover >$300m pa

Employs over 270 staff

ElectraNet Slide 5

QLD

NSW

SNOWY

VIC

TAS

SA

400 MW

1000 MW

1900 MW

680 MW

677 MW

450 MW

1078 MW

1100 MW

3000MW

Existing Interconnector(export direction)

WA

NT

National Electricity Market (NEM) Grid

600 MW

Total Demand: 38,842 MW

National Electricity Market is

made up of five regions joined

by transmission interconnectorsQld

8,891 MW

NSW

14,289 MW

Vic

10,459 MW

SA

3,413 MW

Tas

1,790 MW

ElectraNet

Role of Transmission in the Market

Slide 6

Build, operate and maintain the electricity transmission ‘highways’ that transport electricity from generators and interconnectors to distribution networks and large direct connect industrial customers.

Supply competitive electricity transmission services and high levels of safety and reliability for the benefit of customers.

Competitive Regulated Monopolies Competitive

ElectraNet Slide 7

Network Service Provider (NSP)

Network Companies are common carriers of generators’ and/or retailers’ energy on a non-discriminatory basis, but are NOT responsible for:

– the generation of electricity– the trading or setting of Spot Price for electricity– the operation of the National Electricity Market

Networks provide:

– least cost transport for generators– reliable and secure power delivery for customers– access to competitive market for participants

ElectraNet

South Australian Energy Consumption by Source

Slide 8

Trends are:

• Coal from 35% to ≈ 30% - slow decline but relatively constant

• Gas from high of 55% to 45% - ramped up to replace interconnector then declined

• Wind from 5% to >20% - growing source, SA Govt target is 33% in 2010

• Net Interconnector from high of 18% to low of 0% to 5%

ElectraNet Slide 9

South Australian Emission Levels

South Australian electricity emissions are continuing to trend down and are nearly 20% down on 2004/05 peak

www.electranet.com.au

Slide 10

Role of ElectraNet

ElectraNet Slide 11

The Roles and Expectations on Transmission

Fundamental role – reliable delivery of bulk electricity supply to major load centres

The vast majority of ElectraNet’s five-year investment program is reliability driven: i.e. by the need to “keep the lights on” in the face of ever increasing demand

Investment is only just keeping pace with load growth – just-in-time is the credo

The reliability impacts of transmission failures can be severe (e.g. US and London blackouts)

ElectraNet Slide 12

The Roles and Expectations on Transmission

Additional role – delivering potentially lower prices by facilitating competition between generators both intra-state and inter-state

Competition can be lessened and consumers can be worse off if there is inadequate transmission transfer capacity

Unlike for reliability, outcomes to date have been sub-optimal – there have been high wholesale price events - focus has been more on developing a National Electricity Market than a National Electricity Grid – this is changing

ElectraNet 13

Investment and Reliability of Supply

“Figures around recent and projected price rises are regularly cited in media reports

What is less frequently mentioned are the costs to consumers and the costs to business from a lack of reliability because of underinvestment.

Lack of reliability in our electricity supply would threaten jobs, threaten business and undermine our economic prosperity.

This is why it is so important to get the balance right, why it is vital that we don’t stand in the way of required investment…”

“Energy networks play a crucial role in bringing reliable energy to households and businesses – they are the foundation of our modern economy”

Source: Martin Fergusson speaking at ENA Smart Networks Summit, 18 May 2011

www.electranet.com.au

Slide 14

New Generation and Network Development

ElectraNet

Renewable and Emergent Technology in SA

20102012

20122014

20142016

20162018

20182020

20202022

20222024

20242026

20262028

20282030

Coal to Liquids

Geothermal

Wind

Wave

Solar

Slide 15

Feasibility Studies Construction PilotDemonstrationCommercially available

Grid connection

An optimistic view of timelines …

Wind is presently the only mature technology; however, Solar thermal is improving and all should reach ‘Grid Parity’ by ≈2016

ElectraNet 16

Wind Generation Connection Outlook

South Australia has about half of the nation’s installed wind capacity

~1,200 MW operational and under construction

20% of annual energy requirements are now met by wind

Significant potential for further development (SA Govt target = 33% by 2020)

Capacity for total wind connections of approx. 2,300 MW

Beyond this requires significant transmission investment; e.g. Eyre Peninsula

ElectraNet

Wind Projects Summary 2011

Waterloo (111MW)

Clements Gap (57MW)

Snowtown S1 (99MW)

Starfish Hill ETSA (35MW)

Wattle Point (91MW)

Lake Bonney S1 (81MW)

Lake Bonney S2 (159MW)

Lake Bonney S3 (39MW)

Canunda (46MW)

Cathedral Rocks (66 MW)

Mount Millar (70MW)

Hallett S1 Brown Hill (95MW)

Hallett S4 North Brown Hill (132MW)

Hallett S2 Hallett Hill (71MW)

Hallett S5 The Bluff (53MW)

Willogoleche (50MW)

Hallett S3 Mt Bryan (99MW)

Robertstown (90MW)

Stony Gap (99MW)

Snowtown S2 (206MW)

Kongorong (120MW)

Allendale (69MW)

Mount Hill (80MW)

Barn Hill (124-186MW)

Kulpara (109MW)

Lincoln Gap (177MW)

Carmody’s Hill (140MW)

Robe (600MW)

Registered/Operating

Under Construction

Future Pipeline

Legend

Woakwine (300-600MW)

Keyneton (120MW)

Collaby Hill (150MW)

Yorke Peninsula (600MW)

ElectraNet Slide 18

Future Retail Electricity Prices

31% nominal increase over three years

76% of increase is related to wholesale energy and distribution costs

7% of increase is due to transmission costs

Source: AEMC Report, 30 Nov 2010.

Figures are representative for customers on standing offer contracts

ElectraNet Slide 19

Future Retail Electricity Prices

Network costs drivers…– increasing levels of capital

works to meet growing demand and replace ageing assets

– higher rates of return due to increase in debt premiums following GFC

– higher input costs as commodities market recovers from GFC

– Changes in reliability standards

Source: AEMC Report, 30 Nov 2010.

www.electranet.com.au

Munno Para Substation

Slide 20

ElectraNet Slide 21

Background

A substation is required in the Munno Para region. This facility will provide the bulk supply connection point between the 275 kV line delivered by ElectraNet and the 66 kV distribution supply required by ETSA Utilities.

This need was identified after examining supply issues for the northern suburbs 66 kV network. The identification process followed procedures established by the National Electricity Rules. The options considered were subjected to Regulatory Test

The process confirmed the necessity to construct the infrastructure in this region, with an energisation date of November 2014.

ElectraNet Slide 22

Background … continued

The preferred site was deemed to be must suitable because:

– It is located at the connection point between existing 275 kV and 66 kV transmission lines;

– It is a level undeveloped site;

– The land available is of suitable size;

– It has minimal residential development in the vicinity; and

– There is an established corridor of trees bordering the road frontages.

ElectraNet Slide 23

LMC:FutureResidential

Seagas Pipeline

Enet Transmission Line

Dwellings

Dwelling

Dwelling

ETS

A U

tiliti

es L

ine

CFS Depot

300 m

Proposed ETSA Utilities Site

Proposed substation site(Not to Scale)

Proposed DTEI Site

Munno Para Substation SiteLot 1000 DP 43447Acquisition Area 12.0 ha (subject to survey)

Note: Area required for the substation site is approximately 10Ha. This allows for current works, future upgrades, and an appropriate buffer zone.

ElectraNet boundary (indicative)

ETSA Utilities Boundary (indicative)

DTEI boundary (indicative)

Allotment Boundary

ElectraNet Slide 24

ETSA Utilities also requires land on which to construct their distribution infrastructure. ETSA will therefore also be a party to this development.

DPTI also have secured an adjoining site on which to construct infrastructure for the electrification of the Gawler railway line.

Acquisition Partners

ElectraNet Slide 25

Munno Para site – existing 275 kV transmission line.

ElectraNet

Development Timeline

Slide 26

Site secured

December 2011

Specifications Developed

Contracts awarded

Jan 2012

Detailed Design Jan

2013

Civil Works commence

Sep 2013

Substation Energised

November 2014

ElectraNet Slide 27

Picture of visualisation

Visualisation of Munno Para Substation

View from Dalkeith Rd, CFS Depot in the foreground

www.electranet.com.au

Slide 28

Questions?