NSW energy roadmap expected to lower power prices, create jobs, and ‘diversify’ state’s energy mix

By Shannon Jenkins

Tuesday November 10, 2020


The New South Wales government has unveiled a 20-year plan expected to deliver $32 billion of private sector investment in electricity infrastructure by 2030, including large-scale generation, storage and transmission.

Announced in the lead up to next week’s state budget, the Electricity Infrastructure Roadmap has been designed with the hope that it will “secure NSW’s future as an energy superpower”.

The state government says the roadmap will contribute to its Net Zero Plan by delivering 90 million tonnes of reduced carbon emissions by the end of the decade.

It will also see the establishment of Renewable Energy Zones in the Central West and New England regions by 2030, and is expected to support more than 6300 construction and 2800 ongoing jobs.

Unlocking the zones will “diversify the state’s energy mix”, the government says in a report on the roadmap. The state’s transmission capabilities will also be expanded, opening new parts of the National Electricity Market for energy generation in locations with strong renewable resources.

Landholders in regional NSW will be able to lease their land to host new electricity infrastructure, and are expected to receive $1.5 billion in lease payments to 2042.

The plan also includes $50 million in grants to support the delivery of pumped hydro projects.

The government notes that it needs to deliver its modernised electricity system in order to replace four coal-fired power stations that are scheduled to close within the next 15 years, starting in 2023.

“These power stations currently provide around three quarters of the state’s energy supply; if they are not replaced before they close there will likely be substantial price rises,” the report says.

“That investment is unprecedented in both its scale and the relatively short time over which it must be made, given existing generation and transmission took 30 years to plan and build … The infrastructure needed to replace these power stations also has long lead times — for example pumped hydro to keep the system reliable can take up to eight years to plan, design and build. This is why it is important to start developing the infrastructure now.”

Energy minister Matt Kean says the roadmap will support the private sector to bring 12 gigawatts of renewable energy and 2 gigawatts of storage, such as pumped hydro, online by 2030.

“Our priority is to keep the lights on and get power prices down, with the roadmap forecast to save NSW households an average of $130 and small businesses an average of $430 on their electricity bills each year,” he says.

“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.”

Modelling has found the roadmap will lead to NSW being in the top 10 for lowest industrial electricity prices across the OECD.

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NSW Labor, the Australian Conservation Foundation, and the Climate Council have all voiced their initial support for the plan.

“With NSW’s five coal-fired power stations due to retire within 15 years, this plan prepares the state for the future,” ACF’s climate change program manager Gavan McFadzean says.

“Renewables backed by storage is the clean, cheap way forward.

“By setting a clear, long-term plan the state is setting in train an orderly transition that will protect communities and workers. The federal government could learn from this roadmap — the future is in clean energy, not dirty, polluting fuels like gas.”

A Manufacturing Renewables Taskforce will be established to find ways for NSW materials to be used to build the state’s Renewable Energy Zones.

It will consist of representatives from the steel, aluminium, cement, concrete and manufacturing industries, the workers unions, renewable development stakeholder groups and the state government.

Kean says the group will explore material sourcing, supply to contracting arrangements, and ways to give NSW manufacturers a competitive advantage in emerging ‘green’ supply industries.

“Industry tells us we will need more than 650,000 tonnes of steel to deliver our three Renewable Energy Zones. My priority is finding ways to make sure that the steel and other products that power NSW, are made in NSW by NSW manufacturers,” he says.

“The taskforce will look at terms we can put in our electricity infrastructure contracts and tender rules which will drive the use of NSW products, where they are cost competitive.”

A Jobs in Renewable Energy Zones Taskforce will also be established to ensure that locals get the jobs created in the communities hosting the new infrastructure.

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