Australia-Asia PowerLink, Stage 3, BUSINESS CASE EVALUATION SUMMARY

Review summary

Infrastructure Australia has evaluated the business case for Australia-Asia PowerLink in accordance with their Statement of Expectations, which requires us to evaluate project proposals that are nationally significant or where Australian Government funding of $250 million or more is sought. As a result of our assessment, Australia-Asia PowerLink has been updated on the Infrastructure Priority List to an Investment-ready (Stage 3) proposal.

The Australia-Asia PowerLink (the “Proposal”) develops northern Australia’s comparative advantages in solar production to provide zero emission electricity to Darwin and Singapore. This would provide less expensive electricity to Darwin customers, reduce Australia’s greenhouse gas (GHG) emissions and develop a new renewable energy export industry for northern Australia. Indirect benefits to Australia include an uplift in economic activity from spin-off industries to support the Proposal’s construction and operation, as well as the potential catalyst for new industry investment to take advantage of lower energy costs, which may include green hydrogen, electrified LNG, critical minerals processing, data centres, green ammonia, green steel, and blue hydrocarbon industries (dependent on the availability of Carbon Capture and Storage).

The Proposal is strongly aligned with government priorities around development of northern Australia and transition to
less carbon intensive forms of energy.

The public benefit to the Australian community from the Australia-Asia PowerLink proposal is highly positive, including
lower cost energy in the Northern Territory, catalysing a new renewable energy export sector to Southeast Asia and
potentially spurring new economic activity centered around the Proposal’s delivery and industrial users. The benefits are
premised on the Proposal being largely developed on a commercial basis with private funding rather than underpinned
by public subsidies. The realisation of benefits is dependent on the Proponent achieving contracted energy supply to
enable a financial investment decision and lock in financing terms.

In conducting the evaluation, Infrastructure Australia has not considered the commercial viability of the Proposal and
has only considered the public benefit impacts relating to the Australian components of the project. Our evaluation
made reasonable assumptions regarding the potential for the Proponent to seek Australian Government financing in the
form of export financing or project development loans, and we are comfortable this presents a relatively low downside
impact on the level of public benefit. The Proposal has a stated benefit-cost ratio (BCR) of 2.4 at a discount rate of 7%.
This reflects the estimated costs and benefits that accrue to the Australian community. The Proposal also provides a
range of benefits to overseas electricity consumers, GHG emissions reductions from overseas energy consumption, as
well as the majority of costs being related to supplying electricity to Singapore. These have not been factored into the
assessment of the Proposal from an Australian perspective and for the assessment of the benefits for this evaluation but
they are critical for the Proposal’s commercial viability.

Proposal description

The Australia-Asia PowerLink (https://suncable.energy) is a large-scale solar farm, energy storage and transmission
system to provide renewable electricity to the Northern Territory and to export to Singapore. It includes:

• a Solar Precinct in the Barkly region of the Northern Territory, covering 12,000 hectares that generates 17-20 Gigawatt (GW) (peak) from the solar photovoltaic (PV) arrays. As a comparison, Loy Yang in Victoria (A and B), which is Australia’s largest power station, has a capacity of 3.6 GW, although the power generated per GW of capacity is higher for coal-fired power than for solar PV;

• 36-42 GW hours of energy storage; an 800km, 3 GW high voltage direct current (HVDC) overhead transmission line from the Solar Precinct to near
  Darwin;
• provision of approximately 800 Megawatts (MW) of electricity to the Darwin region. By comparison, Territory
  Generation, which is the largest electricity producer in the Northern Territory, has capacity of approximately 600
  MWs; and
• provision of 1.75 GW of electricity to Singapore, via a 4,200km subsea cable, expected to represent up to
  approximately 15% of Singapore’s energy needs.

Source