Transgrid PSCR: Managing the risk of capacitor bank failure

Market Network Service Provider
StageProject Specification Consultation Report
ConvenorAEMO NSP
Accepting submissions?Yes
Submissions close03/11/2023

Transgrid has published the Project Specification Consultation Report (PSCR) for Managing the risk of capacitor bank failure. Publication of this PSCR represents the first step in the Regulatory Test for Transmission (RIT-T) process.

Capacitor banks are essential for ensuring that system voltage levels are maintained within +/-10% of nominal volts, as required under the NER. The likelihood of capacitor can and reactor failure is expected to increase as the units continue to deteriorate. If left unaddressed, this will result in unserved energy for consumers, costs associated with replacements (with long lead times) as well as higher risks relating to safety and environmental issues.

If left unreplaced, the likelihood that the identified capacitor banks will fail is expected to increase significantly as the capacitor banks continue to deteriorate. If the capacitor banks are not available during times of high load, load shedding will be required to take place for customers in NSW to ensure that system voltage levels remain within +/-10% as required by the NER. The impact of each capacitor bank failure on lost load varies depending on where the capacitor bank is located on the network and whether viable spare parts are available. Asset failure may also increase the risk of safety and environment issues, and the potential costs of emergency repair and replacements. Given the limited availability of spares, the duration of such outages will also be expected to increase over time. On the basis of this assessment, we consider that replacing the identified capacitor banks would be expected to result in economic benefits for consumers by reducing the risk of load shedding.

In the PSCR Transgrid presented one credible network option that would meet the identified need from a technical, commercial, and project delivery perspective. This PSCR finds that implementation of Option 1 is the preferred option at this draft stage of the RIT-T process. Under Option 1:

  • Kempsey No 1 Capacitor, Narrabri No 3 Capacitor, and Coffs Harbour No 1 Capacitor would undertake a renewal of the capacitor bank bays i.e., replacement of all components within the capacitor bank, whereas Narrabri No 2 Capacitor would have only its capacitor bank cans and associated steelworks replaced.

The estimated capital cost of this option is approximately $10.22 million +/- 25 per cent. Transgrid is the proponent of the proposed network project.

Transgrid welcomes written submissions on materials contained in this PSCR, particularly regarding the potential of non-network options to satisfy, or contribute to satisfying, the identified need for this RIT-T.  Submissions are due on 3 November 2023.

In accordance with the requirements of the Rules, a summary of the Project Specification Consultation Report is made available on the AEMO website. A copy of the PSCR can be obtained from Transgrid’s website or by emailing

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