The successful projects from AEMO Services’ first competitive tender have been revealed. NSW consumers are expected to profit from some of the lowest costs acquired through similar tender processes in Australia.
The projects, chosen as part of the NSW Electrical Infrastructure Roadmap, will assist a new wave of electrical infrastructure that will power NSW businesses and homes in the coming decades, after the retirement of the state’s ageing coal-fired generation fleet.
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According to AEMO Services Executive General Manager Paul Verschuer, the chosen projects would provide enough electricity to power 700,000 homes and represent a total investment of more than $2.5 billion in NSW’s renewable energy infrastructure.
In terms of specifics, it secured strike pricing for wind below $50/MWh (2023 real) and solar below $35 (2023 real), AEMO Services Chair Dr Paul Moy said.
Quotes attributable to the AEMO Services Executive General Manager Paul Verschuer:
“There is clearly a strong appetite for private sector investment in generation, storage and firming assets which capture the enormous economic opportunity of the energy transition, and we’re incentivising that investment through this tender process.
“This tender round has brought forward a range of innovative and considered initiatives from proponents, including ambitious projects to secure employment outcomes for First Nations people, careful and creative site selection, and other community benefits.
“A key feature of the tender design was a two-stage process – the first assessed a project’s social licence commitments, deliverability and quality of proponent. The second assessed a project’s financial value.”
Quotes attributable to the AEMO Services Chair, Dr Paul Moy:
“Greater certainty around key aspects of their investment decision will give proponents the confidence to bring projects forward, providing consumers earlier access to clean, reliable and more affordable power.
“Contract innovations embedded in the long-term energy service agreement (LTESA) include binding social licence obligations and a new form of financial contract that is designed to be cheaper for consumers than the traditional Contract for Difference used in other schemes.
“The generation LTESA strike prices are around 40% lower than the levelized cost of energy and an equivalent Contract for Difference and are amongst the lowest prices secured in any similar tender anywhere in Australia. This means NSW consumers will pay less for new generation infrastructure.”
The successfully chosen projects
Three renewable generation projects with a capacity of 1,395MW (4,009 GWh) and one long-duration storage lithium-ion battery project with a continuous discharge capacity of at least 8 hours have comprehensively demonstrated their financial value to NSW electricity consumers and benefits to their host communities.
The successful chosen projects include the 720 MW New England Solar Farm, which is being built in northern NSW by the Australian arm of the Philippines-based clean energy business AC Energy (ACEN), and the 400 MW Stubbo Solar Farm, which is being developed near Dubbo in the state’s central west. The 275 MW Coppabella Wind Farm by Goldwind Australia in the Southern Tablelands region.
RWE Renewables, a German energy company, has also received funding to create a long-duration lithium-ion battery energy storage system with at least eight hours of storage capacity. The 50 MW/400 MWh huge battery will be constructed alongside the company’s current 249 MW Limondale Solar Farm in the state’s southwest, near Balranald.
“We are delighted to be awarded this major battery storage project and look forward to a successful partnership with the New South Wales government. RWE supports New South Wales’ ambition and appreciates the dedication shown by the government in policy design and the professionalism of Australian Energy Market Operator Services Limited in implementation which enables the market to invest with confidence. This success creates further momentum working towards a sustainable future in our core market Australia. In a renewables world, battery storages are key for a reliable, secure and sustainable electricity supply,” Katja Wünschel, CEO of RWE Renewables Europe & Australia, said.
ACEN Australia CEO Anton Rohner with, from right, ACEN CEO Eric Francia, local member Adam Marshall and Federal Energy Minister Chris Bowen. New England Solar officially opened on March 16, 2023, reaffirming ACEN’s commitment to strengthen Australia’s energy security while bolstering the country’s roadmap to a low carbon future.
About the NSW Electricity Infrastructure Roadmap
The NSW Government announced the NSW Electricity Infrastructure Roadmap (the Roadmap) in November 2020. The Roadmap is the State’s 20-year strategy for transforming the power system into one that is affordable, clean, and dependable. It will lay the groundwork for future generations to enjoy more safe, dependable, and cost-effective electricity. The Electricity Infrastructure Investment Act 2020 (EII Act) makes the Roadmap possible.
The Roadmap is expected to:
- Attract up to $32 billion in private investment for regional energy infrastructure by 2030.
- Support 6,300 construction and 2,800 ongoing jobs, mostly in regional NSW.
- Reduce NSW electricity emissions by 90 million tonnes by 2030.
The role of the NSW Consumer Trustee is critical to the Roadmap’s goal of ensuring that the financial interests of energy customers are prioritised in decision-making. AEMO Services helps determine the quantity and staging of electricity infrastructure investment, risk allocation between project proponents and customers, and access to transmission infrastructure.
Check our page to learn more about the Roadmap.
Source&Images: A NSW Government website, AEMO Services- Media Release 1 May 2023, ACEN Australia website, RWE Renewables Australia website, Goldwind Australia Pty Ltd
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