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NSW makes major push into renewables, electric vehicles

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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.

NSW renewable scenario

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.

“Emerging technologies such as biomass, solar thermal, pumped hydro and large scale battery storage can complement the cheapest renewable technologies that are currently available, such as solar photovoltaic and wind power, to deliver our future energy needs,” the document says.

“Supporting a diverse range of advanced energy technologies can help ensure that our future energy supply is reliable and exible enough to meet demand.”

Its targets for renewable energy are interesting, suggesting a big rise in rooftop solar – mostly from commercial and industrial installations in coming years – and more than 3,000MW of wind and solar, over and above the state-based initiatives.

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.

There is also a push to change the National Electricity Rules to encourage more battery storage and demand response mechanisms to make the grid more efficient and avoid the need for costly upgrades.

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.”

   

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  • MaxG

    Too little too late given the horizon of 2050 — but then: better than nothing.

  • Kai

    Credit where it’s due. This is an important change for the largest economy in Australia and making it politically difficult for the Federal Government to ignore the transition any longer. This is a starting point from which the transition is likely to be accelerated in years to come.

  • john

    As was expected it was going to be local government and regional governments that would show the foresight to move on RE not National Governments.
    Except for the EU China and to some extent India so it has proved to be correct.
    Australia and the USA at the federal level have proved to be fail in this regard.
    In the area of State Governments all the signs are very positive and when it is all said and done the Federal Government must be seeing the writing in stark letters and must take notice.
    Where to now i ask of the science minister?; Or that is correct we do not do science any more evidently, so the energy minister then?

  • Geoff

    Wouldn’t trust anything coming from the NSW government especially when they are reversing land clearing laws. Any effort in RE to try and look good will be offset by the amount of tree’s felled to keep their mates happy.

  • Hayden

    Difficult to be too complimentary when it is so, so overdue. Also the EV incentives look a bit pathetic when you look at the incentives overseas and consider the very large health costs associated with FF pollution. Health budget costs are just another hidden subsidy to the fossil fuel industry, paid for by the community. Too little and too late.

    • David Hall

      Hayden, This is Australia and we lag behind most other first world countries in some areas by decades, so I for one am very pleased to see the Baird government get some balls at last and start doing the right thing.
      How much do you believe the FF industry in NSW is costing the health budget?
      Maybe the numbers need ot be put in front of Baird.

      • Hayden

        I don’t have any recent figures re the health costs of FF pollution, but I do remember reading some years back that the CSIRO put the figure at $6B per year. (Yes, billion). And more recently, the acknowledged costs in the US are estimated to be $1B per day. This is the real fossil fuel subsidy.
        I actually have a plan which would allow the very rapid transition to EV’s at ZERO cost to the government. ZERO cost. Only requires the stroke of a pen and a very little imagination.

  • Ken Dyer

    You cannot buy a brand new electric vehicle from a dealer in Australia. If you do, then you will pay luxury car tax, even for something as basic as a Nissan Leaf.
    The dealers see EV’s as a threat particularly to their lucrative service departments for ICV’s Inevitably, EV’s will arrive. The automotive industry, like the horse and cart industry before it, will undergo rapid change, and will kick and scream all the way. Will the NSW Government then justify the Federal slogan “Jobs and Growth”? I would like to see that.

    • Geremida

      get in the order queue for a Tesla Model 3 Ken! https://www.tesla.com/en_AU/model3/reserve
      No dealers required. Only downside is that you’ll need to wait until late 2018/early 2019 to get one

      • Ken Dyer

        Yes I will although I do like the Nissan Leaf.
        For home storage I prefer Zcell available mid 2017. Designed in Australia and superior to the Tesla home storage offering
        https://www.zcell.com/

        • Geremida

          costs you $1500 to buy a place in the queue for a Model 3. And yes I like he Zcell, but Tesla’s new Powerwall – 14Kwh for < $10K including inverter is pretty compelling. I'm actually rooting for both Redflow & Tesla as I'm an investor in both 🙂

          • Ken Dyer

            Good on you brother. Spread the word.