Making Trade-Offs: Investing in the network while keeping costs down

There is no shortage of opportunities for TasNetworks to invest in Tasmania's electricity network.

As the energy system evolves, the network must remain reliable and resilient while adapting to the growing use of rooftop solar, home batteries and electric vehicles. At the same time, new digital systems and technologies are becoming increasingly important, helping prepare the network for future energy demands and emerging risks.

Balancing these needs is one of the key challenges of managing an essential service.

TasNetworks must carefully assess which investments are necessary to meet our obligations, which will deliver the greatest benefits to customers, and which will help the us operate more efficiently. Just as importantly, every investment must be weighed against its cost.

With household and business budgets under increasing pressure, keeping electricity costs affordable is a major consideration.

“Investment decisions often involve trade-offs,” said Sandra Thaow, Revenue Reset Leader.

“Money directed towards one area can mean less available to invest elsewhere. A decision to replace more poles, for example, needs to be weighed against other opportunities to improve the network, such as improving the visibility of our network in our digital systems. Investment to support consumer energy resources such as rooftop solar, batteries and electric vehicles need to be considered alongside maintaining and upgrading the existing network.”

TasNetworks' focus is on ensuring customers' money is invested where it can deliver the greatest value, while maintaining a network that is reliable, resilient and fit for purpose.

Not all investments deliver the same benefits. Some projects may provide long-term value but require significant upfront funding. Others may address immediate challenges but benefit a smaller number of customers. Likewise, some risks may be unlikely to occur but could have serious consequences, while others are more common but have less severe consequences.

As a result, investment decisions are not always straightforward.

In some cases, the best outcome is to invest now. In others, it may make sense to wait until technology matures or costs come down.

By carefully weighing costs, benefits and risks, TasNetworks aims to make informed decisions that support a reliable energy future while helping keep electricity prices as affordable as possible.

This video explains more about how TasNetworks approaches making investment decisions.