NSW makes major push into renewables, electric vehicles

The New South Wales Coalition government has decided to break ranks with its Coalition partners in the federal arena and announced a major expansion into large and small scale renewable energy, as well as electric vehicles and energy efficiency, as part of a new plan to reach “zero net emissions” by 2050.

The state that promised two years ago to become the “California” of clean energy in Australia, but instead saw its ranking as an attractive investment destination plummet, has now decided to do something about it.

It says it wants to encourage new technologies such as solar thermal and battery storage, will issue more government power purchase agreements to ensure more wind and solar farms are built in the state, and will provide incentives for electric vehicles such as government contracts, cheaper stamp duty and lower registration.

In a new strategic plan unveiled on Thursday, NSW has flagged state-based initiatives to build 500MW of large scale renewable energy, including an ACT-style tender for 250MW of new large scale renewables to operate under a competitive tender for “contracts for difference.”

It will also issue more government power purchase agreements such as the 50MW of power purchase agreements, such as those allocated for solar farms in the recent ARENA tender.

It says these should initiatives should encourage even more capacity, and it optimistically predicts it can double the amount of renewable energy capacity between now and 2021/22 to nearly 10,000MW, including a significant increase in rooftop solar.

The timing is interesting. It comes on the eve of the Paris climate agreement coming into force (November 4) – some three years before anyone has anticipated. That effectively locks developed countries into achieving zero net emissions well before 2050, as the Climate Change Authority recently pointed out.

But it also comes at a sensitive time in federal politics. The Turnbull Coalition government has used the recent blackout in South Australia as an excuse to try and force state Labor governments in South Australia, Victoria, Queensland, and the ACT and the Northern Territory to drop their own more ambitious renewable energy schemes.

NSW had expressed support for keeping in line with the federal renewable energy target of 23.5 per cent by 2020, but its strategic document envisages a far higher take up of renewable energy than envisaged by the federal RET.

The document also implies that targets beyond the 2020 RET will be needed to provide certainty and security for renewable energy investment. Crucially, it says that policies need to take into account the Paris agreement, something that the federal Coalition has yet to reflect in its policies.

The NSW policy document also recognises that most of the state’s remaining coal fired capacity – particularly Bayswater and Liddell – will close by 2035, and the state’s future energy needs will be met by renewables such as wind, solar, solar thermal, pumped hydro and large scale battery storage.

That would see it grab a half share of the capacity likely to be built by 2020. But it will be interesting to see how that plays out, given that the Victorian and Queensland governments also plan tenders to help propel their states along the path to 40 per cent renewables by 2025 (Victoria) and 50 per cent renewables by 2030 (Queensland).

The electric vehicle component is also interesting as it recognises the “chicken and egg” situation of having a lot of latent demand for EVs in the market, but not enough supply. That translates into high prices. The state argues that if government departments were mandated to include electric vehicles in their fleets, this would pave the way for more charging infrastructure, more vehicles on offer and lower costs.

The same principal is taken for new technologies such as solar thermal and battery storage. The state wants to provide programs for trials and pilot plants to demonstrate these technologies work, although the detail is short.

Another key focus in energy efficiency – particularly focused on new housing, communities, and providing incentives for rental accomodation and low income housing.

Together, the state estimates that its energy efficiency programs will reduce demand by around 5 per cent by 2025, although a lot of the effort will go into reaching the 2020 target of savings 16,000GWh that was set in 2011 but which has been allowed to drive.

Another focus is on community energy, both helping communities develop their own projects, provide information to people, to share energy, and to encourage developers to share the benefits of renewable energy projects with the local community.

What the documents do not address is the curly questions of land clearing and approval for new thermal coal mines, two practices that work against the principals, and the practicality, of reaching zero net emissions.

The NSW Greens welcome premier Mike Baird’s “epiphany” on climate change, but said he must deal with the coal issue.

“It’s good to see the Baird Government shedding their dinosaur attitudes and changing their philosophy on climate change, however, a 2050 net-zero emissions target will not be reached unless we deal with coal,” spokesman Jeremy Buckingham said.

“I’m pleased the government is adopting Greens’ initiatives, such as the setting state based emission reduction targets, funding renewable energy and energy efficiency, and providing incentives for electric vehicles. Of course, we need more than far-off targets. We need a ban on new coal mines, a state based RET and a transition plan for a rapid and managed switch from fossil fuels to renewable energy.”