In May 2023, the New South Wales (NSW) Government unveiled a comprehensive plan to transition the state’s energy landscape towards clean and affordable renewable energy sources. This initiative follows the Electricity Supply and Reliability Check Up which evaluated the state’s energy infrastructure and formulated recommendations for its transition. The government’s response to this check-up outlines a strategic NSW energy roadmap for securing reliable and sustainable energy for NSW while addressing the impending closure of the Eraring Power Station, a key generator in the region.
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Key recommendations and government acceptance
The New South Wales government has released its plan to secure a reliable supply of clean and affordable renewable energy, which includes a commitment to work with Origin Energy to keep the Eraring Power Station open beyond its scheduled closure date of August 2025.
The plan is based on the recommendations of the Electricity Supply and Reliability Check-Up, which Cameron O’Reilly conducted from Marsden Jacob Associates in May 2023. The Check-Up found that New South Wales needs to take urgent action to ensure enough renewable energy generation, transmission, and storage to replace its retiring coal-fired power stations.
The Electricity Supply and Reliability Check Up committed to a whole-of-government effort to deliver the energy transition for New South Wales households, businesses and communities and made 54 recommendations to keep the Electricity Infrastructure Roadmap on track.
The State Government has accepted 50 recommendations – 44 in full, three in part and three are already underway or complete.
The government’s plan includes three key areas of action:
1. Endorsement of the NSW Electricity Infrastructure Roadmap
The government has endorsed it as a strategic priority and will work with all stakeholders to ensure it is delivered on time.
2. New energy security target monitor
The government will establish a new Energy Security Target Monitor to actively inspect the plans of New South Wales’ remaining private coal-fired power stations as they approach retirement to ensure ongoing reliability at the lowest cost.
3. Streamlining renewables approvals and enhancing community benefit sharing
The government will streamline renewables approvals in the planning system and enhance and coordinate community benefit sharing.
Eraring Power Station's future
The government will also work with Origin Energy to clarify its plans for the Eraring Power Station. Eraring is a major generator the government considers a profitable asset and has a decade left of its technical life.
The energy industry has welcomed the government’s plan, with Endeavour Energy and the Australian Energy Council expressing support for the recommendations. However, the Climate Council has criticised the plan, saying that extending the life of Eraring would be a “disaster”.
The government’s plan is a positive step towards securing a reliable supply of clean and affordable renewable energy for New South Wales. However, it is important to note that the plan is still in its early stages, and several challenges must be addressed to implement it successfully.
Mitigating reliability risks
Despite efforts by the government, the Australian Energy Market Operator (AEMO) has warned of potential reliability risks if new network and firming infrastructure do not arrive on schedule. The government is exploring various options to mitigate these risks, including extending the timeline for Eraring’s phase-out, collaborating with Origin Energy, and accelerating firming infrastructure development.
Diverse storage technologies
The Check Up report emphasised the need for long-term storage solutions in NSW. This may require a more diverse mix of technologies than originally envisioned in the 2020 Roadmap. The government will continue to secure private investment in renewable energy generation and storage while coordinating REZs across the state.
Industry responses
Endeavour Energy: The energy distribution company supports the report’s findings, highlighting the importance of distribution in the transition to renewable energy. They acknowledge the need for a smarter, cleaner, and more affordable energy system and intend to harness existing renewable energy resources across their extensive grid.
Australian Energy Council: The industry association acknowledges the complexity of the energy market transition and supports the report’s recommendations. They stress the importance of balancing the phase-out of old plants with the introduction of replacement generation for reliability and affordability.
Climate Council: In contrast, the Climate Council expresses concern over potentially extending the Eraring Power Station’s phase-out, urging investment in renewables and discouraging support for aging coal stations.
Infrastructure development challenges
In addition to Eraring’s potential extension, the report highlights delays in major projects like Snowy 2.0 and the Central West-Orana renewable energy zone, showcasing the difficulties in translating ambitious plans into on-the-ground infrastructure.
Source&Images: NSW Climate and Energy Action, Energy Magazine
Securing a sustainable NSW energy future
The New South Wales Government’s response to the Electricity Supply and Reliability Check Up demonstrates a strong commitment to transitioning to clean and affordable renewable energy. The comprehensive plan addresses various aspects of the energy landscape, from infrastructure development to private-sector collaboration. While there are differing opinions on the role of existing coal-fired power stations like Eraring, the overarching goal remains clear: securing a sustainable NSW energy future.
The NSW Electricity Supply and Reliability Check Up advocates a multifaceted approach to managing supply and reliability challenges in the current decade, emphasising flexibility and prudent decision-making. As NSW moves toward its Net Zero by 2050 target, this independent report and the government’s response represent a fresh and welcome perspective on the energy transition, shedding light on the complex decisions ahead.
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