Transend - Appendix 5 Renewal capital expenditure - Australian ...

7.1 MAINTAIN THE EXISTING ASSETS AND DEFER REPLACEMENT
0BInvestment Evaluation Summary
TNM-GS-809-0720
This option essentially comprises maintaining the existing secondary systems and to undertake repairs as necessary.
This option does not address the compliance, operational, reliability and maintenance issues outlined in this paper. In
addition, it does not align with good electricity industry practice or the strategies detailed in the respective asset
management plans. Maintaining the existing secondary systems presents the significant risk of failures impacting on the
operation of the transmission network. It also would not provide adequate spares to sustain the serviceability of the
protection schemes into the future.
This option is also not efficient because it would not take advantage of the benefits associated with coordinating the
protection scheme replacements with those at the connecting substations and switching station.
Deferral of this project would result in the need for additional operating expenditure of up to $70,000 over the next seven
years to carry out planned maintenance. This figure does not include any costs associated with corrective maintenance or
the impact of unplanned outages.
7.2 UNDERTAKE THE IDENTIFIED WORKS AS AN INTEGRATED PROJECT
This option proposes that all of the identified works associated with the secondary systems at New Norfolk Substation be
integrated into a single project. This approach will ensure that the works are undertaken under a single contract, hence
reducing contract management costs and avoiding potential hazards associated with critical design information handover
between different contractors. The cost of mobilisation and de-mobilisation will be reduced. Delivering this project in a
shorter time span will also limit exposure to changing technology.
8 OPTION ESTIMATES
A comparison of the net present value of options is provided in Table 1.
Table 1 – Comparison of options considered
Option Net present value of costs ($M June 2007)
1 Maintain the existing assets and defer replacement 5.27
2 Undertake the identified works as an integrated project 3.97
The capital project estimate is $5.58 million ($2008–09).
9 PREFERRED OPTION
Option 2 is the preferred option because it is the least-cost solution that addresses all of the identified issues.
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