Transgrid will launch an investigation into the cause of the massive fire that engulfed one of its power substation transformers at Dapto on Saturday.
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However, the company's general manager of maintenance Ian Davidson said it had to wait until the fire is completely out before any work to understand what happened.
"It's too early to speculate the exact cause, but it's quite obvious the unit has suffered an internal fault, which has led to this catastrophic failure," he said.
He said the unit - which is one of four transformers at the Yallah substation - would be pulled apart and the investigation process would take some time.
"We haven't got full safe access to the equipment, there is still extreme heat in the unit and there is still the risk of fire and other minor issues to be managed," he said.
"So what we do now, is we are monitoring a very small fire that continues to smoulder. We monitor that with the HAZMAT resources and until that is completely over and out, we hold station and then get into the clean up."
He said the fire was unlikely to have been caused by any stress on the electricity grid or the broader Australian power supply crisis.
"We have four of these transformers [at the site] and we're not overloading them or running them beyond rating," he said.
"So it was not under any undue stress or pressure."
Mr Davidson said he estimated that it would cost between $6 to $10 million to replace the unit, depending on how much surrounding infrastructure was damaged in the fire.
He said these costs could be covered by the company's usual asset replacement program, so this was unlikely to impact energy prices.
Mr Davidson said the fire had been well managed by Transgrid staff, and the substation system was designed to allow the power supply to continue even when one transformer was out of action.
"We've got capacity for four transformers for that site that allows us to pass supply to our customers, and our grid network is built to allow up to maintain our assets," he said.
"With the removal of one of those for maintenance, we can still provide our supply to customers. What that means in the event of a failure [like the fire] is that we can also still maintain supply."
"If we had another unit out for maintenance then you're starting to get to the pointy end of being able to have the power maintained. With two out of four [gone] it's a problem."
Mr Davidson said there had been no chance of the fire burning through the whole substation, as they were designed to be separated.
"We've got spill oil systems designed to capture burning oil in events like this, so it has been managed in accordance with what we would expect," he said.