The New South Wales government has signalled its intention to fast-track the development of a 800km transmission line linking the state’s grid to renewables rich South Australia, after awarding the $1 billion project “critical infrastructure” status.

NSW Planning Minister Rob Stokes said on Thursday that the proposed high-voltage interstate grid connection”could provide an important piece of NSW’s energy security puzzle by improving network security and reliability.”

The project, which is being led by transmission network companies ElectraNet and Transgrid, has been hailed by its proponents as the answer to the decline of black coal generation in NSW, and as a substitute to high-cost gas generation in South Australia.

As we reported here, the final proposal from ElectraNet and Transgrid said the new interconnector would deliver twice the benefits to consumers than had been previously estimated.

“The retirement of coal generation is expected to be most rapid in New South Wales,” it says, noting that the state is facing the imminent closure of Liddell, and then Vales Point, with Bayswater and Eraring following in 2035.

They said the new link would help deliver significant new wind and solar resources to NSW from South Australia, while numerous solar projects totalling more than 600MW in the pipeline in the Riverina region of NSW would also be unlocked.

The next step for TransGrid is to prepare an environmental impact statement for the project, that must be assessed before making a recommendation to minister Stokes for a final decision on planning approval.

NSW environment minister Matt Kean said this week that the transmission line was a priority project for the state’s Transmission Infrastructure Strategy, as well as for the planning for the greater grid – it will include a side connection to Victoria, too.

“This project could facilitate the development of energy projects proposed in NSW’s Far West and Riverina-Murray regions, including the South-West Energy Zone,” he said.

The push to fast-track the new transmission line comes as the Basslink undersea cable connecting mainland Australia to Tasmania suffers another outage, which looks like taking it out of the equation until October.

Basslink investigators said on Monday they had found a failure in the low-voltage cable that had caused its Direct Current Protection system to trip on Saturday.

The problem has since been traced to an above-ground section of the low-voltage cable in the transition station in Victoria.

Plans to build a second undersea cable between the island state and Victoria have also been gaining momentum, as a way for Tasmania to share hundreds of megawatts of “spare” hydro capacity with its northern neighbour.

At the recent Power + Utilities conference in Melbourne, Hydro Tasmania’s Christopher Gwynne suggested that the Victoria load-shedding events of the January 2019 heat-wave could have been avoided if a second link had existed.

“If you do put more interconnection between Tasmania and the rest of the market, Tasmania will all of a sudden have access to new sources of low-cost supply, whether that be wind and solar generation from Tasmania itself that gets developed off the back of the interconnector… or it’s new development from Victoria or anywhere else in the NEM,” Gwynne said.

“Essentially, then, you could start to free up this flexible (hydro) capacity to be doing something else in the (mainland) market.”