A new electricity transmission project has been proposed near Bendigo.
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Electrical company Transgrid, along with the Australian Energy Market Operator-Victorian Planning (VNI), published the Project Assessment Draft Report on Friday afternoon.
The suggested line will start north of Ballarat at a proposed new terminal station, shared with AusNet's Western Renewables Link formerly known as the Western Victoria Transmission Network Project.
The line will then travel through the Bendigo region to Kerang and into New South Wales.
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The Victoria - New South Wales Interconnector, or VNI West, is estimated to cost approximately $3.256 billion and half of this will be spent in Victoria and the other half in New South Wales.
The VNI West project will be the second 500 kilovolt transmission line in the region and include similar infrastructure to the controversial Western Renewables Link, which has faced strong community opposition.
Transgrid chief executive Brett Redman said in a statement, "our investigations with AVP have determined the VNI West (via Kerang) option would provide the best outcome for energy consumers."
The project needs to go through the regulatory assessments, or RIT-T, and a six week community consultation period is now open.
Stakeholders and community members have been encouraged to provide written statements on the draft report or register for Transgid's community forums in August.
Transgrid has started consultations with shires and councils that are affected, including the Hepburn Shire, according to a Frequently Asked QUestion document, and stated underground lines were considered but deemed "not economically justifiable" for the full length of the project.
"Significant third-party funding commitments (or other interventions) would be required if undergrounding was deemed necessary to balance the cost of investment."
To provide feedback email VNIWestRITT@aemo.com.au, for more information go to: aemo.com.au/VNI-West.
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