The government of NSW has accepted that three-quarters of the state’s electricity supply will need replacing within 15 years and delivered an Electricity Infrastructure Roadmap to target $32 billion of new private investment by 2030.
The plan will encourage investment in new wind, solar and storage projects through the establishment of a transmission development scheme and electricity infrastructure investment safeguard.
The government says a coordinated approach to transmission, generation and storage will:
- Deliver about 12GW of new transmission capacity through the Central-West Orana, New England and South West Renewable Energy Zones by 2030, and even more over time;
- Support an estimated 3GW of new firm capacity in the NSW grid by 2030;
- Attract up to $32 billion in private investment in regional energy infrastructure investment by 2030;
- Support over 6,300 construction and 2,800 ongoing jobs in 2030, mostly in regional NSW;
- Save around $130 a year on the average NSW household electricity bill and $430 a year on the average small business electricity bill between 2023 and 2040; and
- Contribute to the NSW Government’s Net Zero Plan by delivering 90 million tonnes of reduced carbon emissions by 2030.
By signalling its support of a transition to clean energy, the government says it is moving to avoid a situation where investors waiting for high energy price signals to trigger their interest are left with too little time to build essential projects.
“It can take up to 10 years to build a Renewable Energy Zone and eight years to build a large pumped hydro project,” the report says.
The roadmap is clear about why it’s important to get cracking: “Four of the state’s five existing coal-fired power stations are expected to close within 15 years … These power stations provide around three quarters of NSW’s electricity supply,” the report says. “The cheapest replacement infrastructure we need has long construction times.”
Pumped hydro is highlighted as a clear favourite for storage, and the roadmap draws on research from the Australian National University that identified thousands of possible sites in the east of the state. It accepts that the costs of feasibility studies can be prohibitive for developers. In its Integrated System Plan 2020, the Australian Energy Market Operator said NSW needed about 2.3GW of storage between four and 12 hours duration, on top of the 2GW of capacity at the Commonwealth’s Snowy 2.0 project.
Grants will be available to developers of pumped hydro to assist with the cost of early-stage feasibility studies. If a project moves to the construction phase, the grant will be repaid.
A budget of $50 million is available to support up to 3GW of pumped hydro projects, with an estimated 1GW of undeveloped greenfield land and around 2GW of previously developed brownfield land projects.
Key to the roadmap are long-term energy services agreements, where the NSW government will pay an agreed price for electricity. This is the investment signal the government expects will attract private investment in optimally situated generation and storage projects. “Options contracts give generators assurance of a minimum price for their electricity, while a competitive process maximises value for consumers,” the report says.
The roadmap was launched by NSW Energy Minister Matt Kean and Deputy Premier John Barilaro.
“NSW has some of the best natural resources in the world and this roadmap is about acting now to leverage our competitive advantage and to position NSW as an energy superpower,” Kean said at the launch.
The Clean Energy Council welcomed the plan to shepherd in 12GW of new clean energy generation assets and 2GW of storage by 2030 as ageing coal-fired assets are retired.
“This ambitious plan sets NSW up to be Australia’s number one destination for renewable energy investment over the coming decade,” said CEO Kane Thornton.
“It will provide tremendous confidence to private investors about when and where new generation is needed, while resolving a number of the key barriers to investment, such as access to the necessary transmission capacity, investment certainty through long-term energy services agreements and addressing slow and costly planning processes.”
Thornton said the implications for existing generators within renewable energy zones should be considered to ensure that their value is not jeopardised. “Other advanced prospective projects across NSW should also continue to be assessed on their merits,” he said.