Underground Power Cables: Costs and Benefits

Current Issues Brief 11 1996-97

John McIlwraith
Science, Technology, Environment and Resources Group


Major Issues



  • Traffic Hazard
  • Tree Hazard
  • The Costs of Sinking Power Lines in an Inner Suburb


  • New South Wales
  • Queensland
  • Victoria
  • South Australia
  • Western Australia

Developing Issues

  • New Cable Laying Techniques
  • Sharing Conduits with Cable TV
  • Effects of Privatisation

Major Issues

Few people disagree with the proposition that the sinking of electricity cables below ground makes a street or an area more attractive, but implementing such an improvement on a national scale is a formidable challenge. It is one which seems unlikely to be addressed in the foreseeable future.

Less than 7 per cent of Australian homes are served by underground power. This figure conceals the paradox that big areas in outer suburbs have this amenity, while unsightly overhead wiring remains in older suburbs, despite the fact that some of these older suburbs are close to city centres and attract premium property values.

Efforts to increase the area served by underground power vary across Australia. In most States, underground power connection is compulsory in newly developing outer suburban subdivisions, but in general it can be said that there is little political will to do more.

At first glance, a proposal to have underground power conduits shared with cable TV and other telecommunications would seem attractive-even more so with the growing Australia-wide resentment of television cables being strung along street poles, and the increasing anger of local governments and their constituents at this unsightly 'invasion'.

However, the advocates of underground power throughout Australia are wary and even opposed to any quick embrace of cable TV, for they see the issues being so complex that they are likely to delay the sinking of electricity power lines. Engineers point out that these complexities are such that the sharing option has not been widely debated.


It would cost up to $50 billion to put all of Australia's existing overhead power lines underground. This figure has been conservatively calculated after discussing the issue with executives in a number of distribution systems, and it is based on precise calculations made in specific areas. It is a considerable investment, similar to the current total investment in the nation's power generation and transmission systems; but if this cost can be faced, the benefits, even in dollars and cents, are considerable.

In countries where there is a shortage of land it is sometimes attractive to bury high voltage lines. In the Philippines, for example, the sale of the easement on which overhead lines have been built has yielded enough money to bury them and make a profit.

In most Australian states, underground power delivery is compulsory in new, outer suburban subdivisions and this has had some impact in recent years. It is estimated that between 150 000 and 200 000 new homes are connected to underground power supplies each year throughout Australia, and over a number of decades this will result in a significant proportion of the national housing stock having underground connection.

Paradoxically, the aesthetically pleasing and technically desirable option of underground power will be in place in the outer suburbs, while highly valued neighbourhoods close to central city areas are much less likely to benefit. Central city areas are almost universally served by underground distribution systems, but there are many near-city suburbs where this has not occurred, nor is it likely to.

There have been exceptions in inner high-value suburbs, where wealthy local authorities with relatively low levels of debt have introduced their own schemes-sometimes attempting to retrieve some of the costs from householders, sometimes simply adding it to the rates. Without political and community will, however, it is unlikely that older established areas will be transformed on a large scale in the foreseeable future. Some transmission authorities point out that even when inner suburban areas are 'gentrified', the piecemeal manner in which this takes place precludes any neighbourhood-wide effort to sink lines. Nevertheless, utilities engineers point out that if proper assessment is made of maintenance and depreciation of overhead lines, the argument for underground cabling becomes more attractive.

The sinking of high voltage transmission lines presents special challenges, with the costs likely to be five or 10 times (in places even 13 times) the cost of overhead high voltage transmission. It is not surprising that throughout Australia only a tiny percentage of the lines of 66 kilovolt (kv) and above are underground. In the case of the lowest voltage category in this range there are 24 500 kilometres of overhead lines, but only 156 kilometres are buried. Even in the most advanced classification, the 110 kv lines, only 4.6% of 3670 kilometres of lineage (178 kilometres) is buried. The proportion of underground cable in the 132, 220, 275, 330 and 500 kv classifications is even lower.

The following discussion embraces a number of issues associated with undergrounding, namely cost, safety, technical problems, ways in which some communities have removed overhead wiring, and environmental matters.


Traffic Hazard

Safety as well as aesthetics has been a major driving force for increasing the proportion of underground power. For example, in 1993 there were 743 motor vehicle accidents involving power and Telstra poles in Western Australia, six of them fatal.

The South East Queensland Electricity Corporation has estimated that traffic accidents in which cars have hit poles cost $45 million a year. This takes no account of the human cost. One executive pointed out that, because utilities almost always recover the cost of such damage from drivers' insurance companies, the safety aspect of overhead power has attracted little attention throughout Australia.

Tree Hazard

Other safety concerns include the dangers of electrocution when trees are being pruned (there have been several such fatalities in recent months), the danger from falling wires and problems due to storms. The hazards presented by the current power-on-pole systems are immense, and increase as householders demand greener suburbs. A major problem during storms is the damage to overhead lines caused by falling trees. The resultant chaos is not only irritating to householders and industry but also highly expensive to repair. The fragility of our distribution networks in the face of such forces is rarely recognised by householders, and it is only when a major disruption occurs that there is a renewed clamour for underground power.

A storm in May 1994 which severely affected the whole of the distribution network throughout the south-west of Western Australia led to a new drive by the State Government to push ahead with underground power. The storm knocked out a vast part of the suburban and near country distribution system, which in some cases took many days to repair. Trees accounted for more than 80% of the physical damage.

The 1994 storm, and to a lesser extent Cyclone Alby some time earlier, demonstrated the inevitability of power cuts when power is distributed on poles in such a sprawling area with an ever-present threat of tree damage. About 300 000 customers in Perth, nearly half the total, were without electricity for more than 24 hours. A few were not reconnected until eight days after the storm. It needs to be remembered that this storm was not as severe as the tropical cyclones which affect Northern Australia, and that the population of the south-west of Western Australia is less than 1.5 million people.

Trees, debris and the wind itself knocked out 200 of 450 high voltage feeders. Around 850 distribution transformers were also put out of service, as were 310 sections of high voltage distribution lines and 430 street mains. There was also damage to 1800 customer service leads-lines that run into homes. In more than 2000 locations, trees fell or were blown onto wires. About 800 power poles fell or were leaning at the end of the storm.

There was widespread criticism of the manner in which the State utility, Western Power, reacted to the crisis. A formal inquiry concluded that more could be done to handle such massive disruptions in future, but the dedication of Western Power's repair crews throughout that storm was widely recognised. Similar comments could apply to the disruptions that occurred during the wild storms in Sydney during January 1991.

The Costs of Sinking Power Lines in an Inner Suburb

The Perth inner suburb of Subiaco has carried out an ambitious program of burying power lines. The program has been a great success, particularly because many of the streets are narrow (10 metres) and the removal of poles has greatly improved their appearance. The City of Subiaco is believed to be the only local authority in Australia which has undertaken undergrounding without subsidy or charges to individual householders. It chose not to impose charges on property owners because of possible conflict between those who agreed to pay and those who did not.

Subiaco found that by removing unsightly poles, and so being able to improve the alignment of footpaths and roads, it increased average property values by $10 000 per lot on properties valued at $200 000 to $300 000. A similar figure is estimated for other parts of Australia. This seems a reasonable return on the $3000 to $4000 per house required for sinking power lines, especially when the intangible benefits are added.

Subiaco's program began 14 years ago, and by the middle of 1997 some 35% of the suburb's streets will be free of overhead power lines. The council has spent $5.8 million over the past nine years, with a peak of $1 million in the last financial year. While annual budgets for the project will fall in the immediate future, it is hoped that the suburb will be free of overhead lines by the year 2010-though council officers admit that this may be optimistic.

One benefit which all householders with overhead lines will recognise is that the apparently wanton cutting of street trees to provide clearance from overhead lines is no longer necessary, and trees can be allowed to develop their natural shape. In some areas the heavier foliage reduces the benefits of street lighting, but the Subiaco City Council has introduced careful lower pruning and installed more lighting where necessary to alleviate this problem.

A challenge to be faced by undergrounding in many areas is the location of transformers. The poles on which they are currently mounted disappear, and space has to be found for pad-mounted transformers.


The options pursued to encourage investment in underground lines vary from State to State in Australia. A survey of distribution systems across Australia reveals a pattern of inertia, with a few modest schemes and pilot programs. A number of compromise proposals have been studied but, throughout Australia, the economics of burying power lines in existing built-up areas compared with new developments are very different.

The following table shows that a study of the figures for the previous few years show that, while most States had not increased their percentage significantly, South Australia's had leapt from just under 8% in 1988 and Western Australia's from just over 2%. The overall national picture suggests that there is little political will to increase the rate at which power lines are sunk. The Australian average rate is 6.4%.


STATE              NSW        Qld          SA         Tas         WA         Vic 

U.G.%              8.4        4.5        10.0         6.0        5.5         4.0 


New South Wales

In New South Wales, the cost of placing the power supply underground is between $1500 and $2000 per residential lot in new subdivisions, while converting existing suburbs doubles this to between $3000 and $4000. The proportion of newer suburbs with underground power is highest in Sydney, where underground connection has been mandatory for such suburbs since the early 1970s. Thus, there has been a quarter of a century of growth in underground power.

Integral Energy, one of Australia's biggest energy services, has 680 000 business and domestic customers spread over 24 500 square kilometres of Greater Western Sydney and the Illawarra. It has almost 30 000 kilometres of cables, with 6500 (22%) underground. As Integral Energy serves one of the fastest growing regions in Australia, the percentage of underground power has increased steadily as new subdivisions have been developed. In addition, the organisation and its predecessors have invested $30 million over the past five years on reducing the impact of existing infrastructure, mostly on underground delivery projects addressing environmental or aesthetic values. The utility does not suggest that this program is a solution to the underground issue, but it has certainly made a contribution.

Some distribution company executives said that while major projects seemed unlikely, progress could be made in areas of special need. For example, where a major new commercial or sporting venue was being built, the undergrounding of power in surrounding streets could be justified. Thus the surge of construction during preparation for the Sydney Olympics could be an opportunity to greatly increase the number of kilometres of buried cable in that city.


In Queensland, little progress has been made. While many councils insist that power be connected underground in new subdivisions, no effort is made to remove overhead lines in established areas. Supporters of underground cabling there say that no cognisance is taken of aesthetic or social values, and that because of high initial costs there is no public pressure to begin even a modest program.

Overhead cabling of many types of material inevitably deteriorates. In a system like that of the South East Queensland Electricity Corporation (SEQEC), this involves an enormous and continuing task. The system has 800 000 customers, 16 000 kilometres of low voltage line, 14 000 kilometres of 11kv line and 400 000 poles. SEQEC's customers range from farmers and small rural industries to the people of the metropolitan region of Brisbane, and the vast areas served by such utilities provide a formidable challenge to even a modest attempt at sinking power lines.

In a few cases, lines are sunk when road widening or beautification schemes are launched and the utility shares costs with a local council or the State Government, but SEQEC executives admit this makes little impact. They acknowledge that there is little interest among either the State Government or local authorities in spending more money on sinking lines underground. A preoccupation with cost makes the prospects for progress in this direction remote.

One executive (who, as was often the case throughout this study, requested anonymity) suggested that some of the money that was allocated to training and employment programs could have been diverted to the open excavations required for underground power. There was a wry comparison with the benefits of such a program compared with those of schemes which employ hundreds of people to improve parks and footpaths in Queensland-a commendably cosmetic goal, but perhaps one with less long-term impact than the introduction of underground power.


Like most other states, Victoria requires new subdivisions to be provided with underground power connections. In rural areas of Victoria, householders are encouraged to run the line from the nearest distribution point to the house underground. While still a small proportion of the total kilometres of distribution lines, this option is gaining favour.

South Australia

In South Australia there has been a strong emphasis on linking underground power with environmental or traffic issues. Installing underground power lines in new subdivisions has been compulsory under State law since the early 1980s. In recent times further efforts have been made to accelerate the program. Considerable effort from the Electricity Trust of South Australia has made the South Australian percentage of underground power the highest in Australia. By the middle of 1994 just over 10% of the State's power lines were sunk.

In February 1990 the South Australian Government decided to place greater emphasis on underground power by increasing the contribution to the sinking of power cables made by the Electricity Trust of South Australia (ETSA) and establishing what is now known as the Power Line Environment Committee (PLEC). PLEC has representation from local Government, the Department of Environment and Natural Resources, Tourism South Australia, the Conservation Council, the Department of Transport, ETSA and two community representatives.

ETSA contributes to a scheme operated by PLEC, which is moving to encourage undergrounding not only in Adelaide but in a number of country towns. ETSA contributed nearly $3 million to such schemes in 1995-96, with other contributions coming from the State Department of Transport and local councils. Since it was launched in 1990 PLEC has allocated funding of $13.25 million for 75 projects in Adelaide, 18 in near city areas, and 46 in the country. By 1994-95, PLEC was administering grants totalling nearly $5 million.

In most projects, ETSA provides two-thirds of the cost of any underground installation, and local government the balance. Where road construction is included, the State Department of Transport contributes an amount equivalent to the cost of relocating the existing overhead power lines.

Several changes in the local power and communications picture have intensified debate about overhead versus underground delivery. One issue, unresolved at the time of writing, relates to Telstra and Optus cabling arrangements. Another is the result of South Australian legislation which passed to local authorities the responsibility of lopping trees to make overhead lines safe. The Government said that 11kv lines would in future not be built overhead but would be put into underground conduits, at least in the metropolitan area. There is also a broad commitment to further increasing underground power in co-operation with local councils, but the extent to which this commitment is effective remains to be seen.

Western Australia

In Western Australia, a pilot scheme has been launched with the objective of ultimately having all suitable areas served by underground power, although the State Government acknowledges this is to be a long-term goal. Western Power, the State Government and local councils make equal contributions to this program.

Underground power connection in new subdivisions in Western Australia was not compulsory until 1991, although many developers chose this course from as early as 1972. There are already about 100 000 customers who are served by underground power, but it would require $160 million a year for 15 years to provide underground power to the 400 000 customers in Perth who are not yet served by this type of distribution and who live in areas where it could be achieved. The State Government is currently seeking to raise between $45 million and $50 million a year for sinking power lines, so some of the customers of Western Power may have to wait decades for their turn.

A pilot scheme has been implemented to determine accurate estimates of costs and see whether there is a sufficient response from local authorities to extend the program; the initial stages of the scheme have proved to be highly encouraging. At the time of writing, Western Power was completing the first project, involving 1800 homes in the riverside suburb of Applecross, where the highly successful use of directional drilling (see below) reduced costs and greatly minimised disruption. A second project at the southern port of Albany will involve 850 homes. These two projects will involve spending of about $10 million.

The second pilot scheme will be completed about the middle of 1997, with the expectation that if results in terms of costs and operating experience are as successful as they have been at Applecross, the scheme will be extended. It should be noted that this scheme is different to the stand-alone, long-term program being carried out at Subiaco which is mentioned above.

The Albany and Applecross programs have been launched with the expectation that it will cost about $4000 per house to provide underground power, but given the unexpectedly successful results with directional drilling these figures may well be improved. The engineers working on the scheme stress that the two programs are designed to provide a great deal of data on large-scale underground power ventures, and there has already been encouragement from the considerable amount learnt in the Applecross phase.

Developing Issues

New Cable Laying Techniques

Some discussion of the techniques used for burying power cables may be useful. The open excavation technique previously used to bury underground cables creates disruption to streets, sometimes for long periods. Directional drilling minimises such disruption.

The directional drilling technique involves sophisticated machines that can drill holes up to 250 metres long. The tunnels or conduits can turn corners and can be sunk to any required depth. A smaller drilling machine is used to make the tunnels which take cabling from the street into individual homes.

A radio transmitter in the drilling head signals to an operator walking on the surface directly above, so that the direction and depth of the hole being drilled can be maintained within an accuracy of a few centimetres. A material called bentonite is pumped into the tunnel to provide a clay-like protective lining, the surplus being pumped out. This sealing is required in the sandy soils of Perth's coastal plain, and might be likened in some ways to the use of the drilling mud which is pumped into an exploratory oil well.

In the case of the Applecross project, the depth of the tunnel was 1-1.2 metres. This is a little deeper than the usual open excavation for underground power, but not so deep as to lead to increased maintenance costs if it is necessary to open holes later. The Applecross scheme is the first project in Australia in which directional drilling has been used on a widespread scale for sinking underground power lines and, while only preliminary results are available, it appears likely that it will reduce such costs by between 5% and 10%.

Directional drilling will not be the answer to all underground power problems. In areas where there is considerable amount of rock or heavy subsoil it will be necessary to revert to the traditional open excavation method. Thus, engineers at Western Power expect that directional drilling will have only limited application in the Albany project.

Engineers in other utilities across Australia are watching the directional drilling program in Perth with considerable interest, but they too point out that the kind of subsoil which has to be removed varies greatly throughout the country, hence directional drilling will not be the answer in many cases. Nevertheless, experience in Western Australia points to the fact that when there is a political will and a technology focus to solve a problem, new solutions appear.

Sharing Conduits with Cable TV

At first glance, a proposal to have underground power conduits shared with cable TV and other telecommunications would seem attractive-even more so with the growing Australia-wide resentment of television cables being strung along street poles, and the increasing anger of local governments and their constituents at this unsightly 'invasion'.

However, the advocates of underground power throughout Australia are wary and even opposed to any quick embrace of cable TV, for they see the issues being so complex that they are likely to delay the sinking of electricity power lines. Engineers point out that these complexities are such that the sharing option has not been widely debated.

One engineer pointed out that it costs about $400 a metre to dig the hole and sink power lines in a street of an established area. Under the formula proposed by some, cable TV companies would contribute only $25 of this cost. This would make a negligible difference to the economics of the task, yet would provide considerable technical problems.

A major issue is safety. Traditionally telephone cables are sunk at relatively shallow depths, and high voltage power lines are sunk much deeper. Currently different cables are also buried on different alignments in a street, and the organisations which dig up streets and footpaths from time to time are familiar with these conventions. If high and low voltage cables were encased in a common conduit or tunnel, the risks of fatal accident would be much greater.

A second and less alarming objection is of a technical nature: that arcing and other problems could occur between the two types of cable. Particularly strong sheathing might offset some of these difficulties, but only at considerably increased cost.

Even setting aside the specific safety and technical objections, no advocates of underground power interviewed were in favour of sharing subterranean conduits with cable television. One engineer put it this way: 'There is at last a growing body of opinion across Australia that is calling for widespread underground power programs, despite the capital cost; but this trend could be greatly inhibited by the complexities of sharing with cable TV.'

Effects of Privatisation

The accelerating trend towards privatising Australia's power generation and distribution industry raises a question as to whether such a striking change in the profile of the industry will impede the development of underground power projects. It may be easier for a government-owned utility to subsidise a new underground power scheme, and more difficult for a company with a responsibility to its shareholders to make such a decision, with its adverse impact on profits.

Perhaps the answer can be found in Victoria, where the distribution system has been broken up into a number of companies and is now in private hands. Before the dissolution of the State Energy Commission of Victoria, between $3 million and $4 million a year was allocated to installing underground power. This work was carried out in areas where cultural or environmental values were important, and the Powerline Relocation Committee considered applications from local authorities or developers prepared to contribute to beautifying an area by reducing the intrusion of unsightly overhead power lines.

Little has changed. The Victorian Government now directly provides $4 million a year for such schemes, with other funds received from parties interested in beautifying an area. No funds come from newly privatised distribution companies, and therefore the change in the industry has meant there is no effect on the move towards underground power, modest though this is.