The Australian Energy Market Operator (AEMO) will play a greater, hands-on, role in the design and planning of New South Wales’ electricity system after being selected to fill a key oversight role for the government’s ambitious Electricity Infrastructure Roadmap.
NSW energy minister Matt Kean has appointed AEMO Services Ltd to serve in the newly created role as NSW Consumer Trustee and will be charged with ensuring future investments in the state’s electricity infrastructure are in the interest of consumers.
The role of the NSW Consumer Trustee was established under the state government’s Electricity Infrastructure Roadmap, which charts a course to replacing the state’s ageing coal fleet with renewables and was legislated last year with almost unanimous support from the NSW parliament.
Kean says the appointment is an important milestone in the implementation of the roadmap, which is expected to attract as much as $32 billion of new investment in wind, solar and energy storage projects.
“The roadmap is a once in a generation opportunity to transform our State’s electricity system into one of the cheapest, cleanest and most reliable in the world,” Kean said.
“The Consumer Trustee will play a vital role in delivering our Electricity Roadmap, acting as the custodian of the long-term financial interests of NSW consumers.”
Kean said the involvement of AEMO will allow the state to take advantage of the knowledge and experience of AEMO, the body tasked with keeping the lights on in Australia’s main grids.
AEMO welcomed the appointment, saying that AEMO Services would be able to ensure New South Wales households and businesses were in a position to benefit from new renewable energy investment – while maintaining AEMO’s existing key role in overseeing the broader energy market.
“Australia is leading the world in the integration of renewable energy into its electricity grids, and has an opportunity to benefit from even greater investment in renewable sources,” an AEMO spokesperson told RenewEconomy.
“AEMO Services will play an important role in helping NSW unlock significant private sector investment in renewable electricity generation, that that will deliver value for households and businesses in NSW.”
“AEMO’s role operating the National Electricity Market, along with other electricity and gas markets across Australia, does not change,” the spokesperson said.
The NSW government committed to appointing a Consumer Trustee as part of its legislated plan to drive new clean energy investment and will be tasked with undertaking long-term planning of the NSW energy system in the long-term interests of consumers.
In the role, AEMO will be required to oversee the planning of investments in new generation, storage, and network infrastructure, as well as running tenders to select projects that will be offered Long Term Energy Service Agreements.
The Long Term Energy Service Agreements will provide price guarantees for new projects that the NSW government expects will reduce project investment risks, lower their overall costs, and deliver lower energy costs for households and businesses.
The NSW Consumer Trustee will also be responsible for authorising new network infrastructure projects, a key component of renewable energy zone plans, ensuring that sufficient new capacity is built to enable new wind and solar projects to serve customer demand.
Through the Electricity Infrastructure Roadmap, the NSW government will take a more active role in planning the state’s future energy system and aims to support the addition of up to 12GW of new wind and solar projects, 2GW of energy storage and coordinated network investment.
The strategy is designed to ensure that enough low cost and low emissions electricity infrastructure is built to replace most of the state’s coal fired generators, which are expected to close over the next 15 years.