Transgrid Project Assessment Conclusions Report: Managing the risk of capacitor bank failure

Market Network Service Provider
StageProject Assessment Conclusions Report
ConvenorAEMO NSP
Accepting submissions?No

Transgrid has published the Project Assessment Conclusions Report (PACR) for Managing the risk of capacitor bank failure. The PACR is the final step in the Regulatory Investment Test for Transmission (RIT-T) process and follows the Project Specification Consultation Report (PSCR) published in August 2023.

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. Transgrid also considered that non-network options may be able to assist with meeting the identified need, specifically non-network technologies that could provide reactive support. Technical characteristics were set out in the PSCR and Interested Parties were invited to make submissions.

No submissions were received in response to the PSCR during the consultation period which closed in October 2023 and no additional credible options have been identified.

The assessment in this PACR finds that Option 1 is the preferred option to meet the identified need. 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.

In accordance with the requirements of the National Electricity Rules, a summary of the PACR is made available on the AEMO website. A copy of the PACR can be obtained from Transgrid’s website or by emailing

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