While you’re down there: a chance to bury the power lines, The Drum Unleashed

September 5, 2012

As the Government rolls out the NBN across the country, they should use the opportunity to move powerlines underground, writes David Hetherington.

There’s been much talk lately about the quality of our politics. Rank populism seems to trump all else, and the Australian Idol comparison rings all too true.

But rejecting low-brow populism doesn’t mean politics should be all high-brow vision and lofty ideals. There should be a middle ground in which simple, practical ideas can cut through too.

So here’s one. With its National Broadband Network, the Federal Government is spending $30 billion rolling out fibre optic cables down just about every street in the land. The NBN is a huge project whose marketing promises big productivity benefits that can’t yet be quantified. But Labor needs to show voters benefits that can be understood now.

Given this, the Government should grab the opportunity provided by the NBN to bury overhead wires once and for all.

Overhead wires and their associated poles are a bane for everyone. They blow down in storms, cutting power to homes and endangering passers-by. They’re ugly. And they kill possums.

More importantly, they cost a fortune for power companies to maintain, and are the major reason our electricity bills are going up. The power companies underinvested in this infrastructure for the best part of a decade and are having to play catch up now, which is why they’re passing on higher prices to the consumer.

If the wires at the suburban level are buried, they’re much cheaper for the electricity distribution companies to maintain. Industry data suggests that maintenance costs of underground cables is less than half their aboveground equivalents.

Another cost saving arises because underground cables don’t suffer the same losses in transmission that overhead ones do. Less power must be generated to deliver the same energy to the end user. This results in a saving of over $200 per kilometre of cable, and less greenhouse gas emissions to boot.

All of this means cheaper prices for us, the end users, making underground cables the holy grail of public policy, a win-win for producers and consumers.

What’s the catch, you ask? Inevitably, it’s the trade-off between upfront investment and subsequent savings. It’s a trade-off our policymakers struggle with, as the debates over preventative health and problem gambling show.

It turns out the upfront investment required to bury the cables is around $11,000 per household without the synergies offered by the NBN. And it’s likely to be significantly less if bundled with the broadband rollout.

Is it worth it? It’s hard to tally up the annual savings in maintenance, tree lopping, transmission losses and possum lives. But one study from ANU found that underground power cables could increase a home’s value by up to 3 per cent. On an average Sydney house, that’s likely to be upwards of $20,000, suggesting the investment is a good one.

Can this really work in practice? It’s already been done in patches around the place. In Western Australia, the Underground Power Program has been running since 1996 and 52 per cent of Perth’s homes now have underground power. The electricity provider Western Power says its reliability levels have greatly improved and resident surveys show satisfaction levels around 90 per cent. In WA, the investment is shared between local ratepayers who pay half, and the State Government and electricity distributor who pay a quarter each.

To roll this out nationally as part of the NBN, the Federal Government should direct its NBN Co enterprise to work alongside power distributors and state and local governments, and provide a minority share of funding, say 10 per cent.

The initiative has many positive spin-offs. The Prime Minister recently criticised the electricity sector for ‘gold-plating’ – here’s an opportunity to ensure that new capital isn’t wasted, but is invested in the most cost-effective way possible.

And with council elections coming up in NSW, it’s an opportunity for local candidates to back a winner. Of course, it would be both logistically challenging and a drain on budgets at a time when the surplus is an all-important priority. But opportunities to go down every street in the nation come along once a generation, and have to be grasped.

What’s more, this modest proposal offers federal Labor something it continues to need – proof of decision and delivery, a visible sign of policy success that voters will recognise immediately.

With public support running at 56 per cent, the NBN is already a popular policy – how better to reinforce this than to deliver a tangible benefit right outside the front door? It mightn’t be the stuff of grand principle, but it would beat rank populism any day.