NSW announces $1.2 billion investment in renewable energy
The New South Wales government has announced its single biggest investment yet in renewable energy infrastructure, committing $1.2 billion to fast-track priority transmission and energy storage projects as the energy sector continues its rapid transformation towards a decarbonised and decentralised future.
New South Wales (NSW) Treasurer Matt Kean said on Friday the record $1.2 billion renewable energy infrastructure investment would form part of the government’s Transmission Acceleration Facility and underwrite the delivery of transmission projects seen as critical to the development of the state’s planned Renewable Energy Zones (REZs).
Kean said the funding, to be included in the budget to be handed down later this month, will be spent on a financing the construction of transmission infrastructure seen as critical for the development of a series of five REZs across NSW. The state government wants to see at least 12GW of renewable energy and 2GW of energy storage projects developed before 2030 to fill the gap created by the impending withdrawal of coal generation with asset owners increasingly bringing forward retirement dates with the influx of wind and solar power making the plants uneconomic to run.
In February, Origin announced their application for Australia’s largest coal-burning power station, the 2,880MW Eraring power station at Lake Macquarie in the Hunter region, to retire in August 2025, seven years earlier than previously scheduled. AGL will shut the 1,680MW Liddell plant in April 2023 and has also brought forward the expected retirement date for the 2,640MW Bayswater coal-fired power plant, also in the Hunter, to “no later than” 2033.
Kean has previously conceded the early closures will cause problems for the grid if the capacity is not replaced but said there are currently more than 50 large-scale renewable energy projects progressing through the NSW planning system, which would deliver 16GW of renewable power into the grid.
However, many of these may never proceed without additional capacity across the state’s transmission network due to a lack of incentives and revenue certainty under the existing regulatory structure.
Kean said the Transmission Acceleration Facility will provide that revenue certainty for project developers and the government estimates it will drive at least $14 billion in private transmission infrastructure investment.
“The facility is a critical step to unlocking the new generation needed to improve competition, lower power prices and secure a brighter future for households and businesses,” he said.
The state’s first REZs are to be delivered in the Central West Orana and New England regions by the end of the decade. REZs will also be developed in the South-West, Hunter-Central Coast, and Illawarra regions.
“Renewable energy zones are modern-day power stations, providing cheap and clean power for the homes and business of NSW,” Kean said.
“This is the state’s largest ever investment in infrastructure for renewable energy and is expected to help create 2,700 direct construction jobs across the state.”
The Clean Energy Council said NSW government’s funding announcement is a significant acknowledgement of the importance of transmission in Australia’s clean energy future.
The council’s director of external affairs, Arron Wood, said industry has consistently identified transmission investment as one of the key barriers to accelerating the deployment of renewable energy in Australia.
“Getting transmission right is crucial in providing developers with the certainty they need to begin making the considerable investments in renewable energy and storage required to decarbonise our electricity system,” he said.
“Government backing of transmission will give renewable energy developers the confidence they need to get on with the job of building Australia’s clean energy future.”
Among the first projects to be financed by the Transmission Acceleration Facility will be the Waratah Super Battery, which the government said will be the largest standby network battery in the southern hemisphere.
The government said the 700MW/1400MWh battery, to be located on the Central Coast, will be operational by 2025 to release grid capacity to ensure Sydney, Newcastle and Wollongong consumers can access more energy from existing electricity generation.
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