NSW dismisses renewable industry fears about future of EnergyCo

The NSW Labor government has dismissed rumours that it is considering reviewing the role of EnergyCo, the statutory body that is charged with rolling out the state’s renewable energy zones and its transition away from coal.

Earlier on Wednesday, RenewEconomy reported that rumours had been swirling through the energy industry about the future of EnergyCo following the government’s receipt of a “health of the market” report by industry consultant Cameron O’Reilly.

The government had been approached for comment, but on publication of the story it was swift to reject the concerns.

“There’s absolutely no truth to claims the NSW Government intends to disband Energy Co,” a spokesperson from state energy minister Penny Sharpe’s office said in a statement.

“The Energy Corporation of NSW plays the lead role in the delivery of Renewable Energy Zones and will continue to do so.

“The NSW Government is considering the findings of the Energy Supply and Reliability Check Up and will make the report and the government’s response public by the end of the month.”

The statement will come as a relief to the industry, which saw EnergyCo – and its staff – as critical players in the energy transition and important to send the right signals to international investors, who are queueing for opportunities to invest in wind, solar and storage in NSW.

Sharpe did not offer any comment about the future of the 2.8GW Eraring coal facility, which is currently scheduled for closure by its current owner Origin Energy in August, 2025.

There is speculation that at least some units may be kept open, at least for another summer, to allow more wind, solar and storage to be delivered.

It is not known what the O’Reilly report has recommended on Eraring. The renewables industry strongly opposes the flagged buyout of Eraring by the new state government, although it appears to have wound back its pre-election rhetoric on the matter.

EnergyCo has come under some criticism from the industry over the handling of community outreach, which is rumoured to have been included in the O’Reilly report, but overall it has been seen to be doing a good job.

The Nationals have made their position abundantly clear in the last few weeks, stating they want the rollout of wind, solar and transmission lines stopped while the country’s energy policy is reviewed, and paused until nuclear power is ready, sometime – perhaps – in the next two decades.

That, of course, would put the country’s already modest emissions reduction targets at risk, and goes against the scientific conclusion that Australia and the rest of the world should accelerate, not delay, decarbonisation efforts to try and avoid the worst impacts of climate change.

NSW is well behind other states in the switch to renewables, but it is playing a key role in the Australia transition because it has the biggest coal fleet with more than 10GW of capacity. This fleet is ageing rapidly, and four, or even all five, of its remaining coal generators could close in the next decade.

The renewable energy infrastructure roadmap was a flagship policy of former state Liberal energy minister Matt Kean, who managed to get support for the ambitious plan from his Nationals colleagues, and across the aisle with Labor with his plan to replace coal with wind, solar and storage.

But the new Labor government is seen to be nervous about the timing of the closure of Eraring in two years, although it is continuing with several major tenders for multiple gigawatts of new wind and solar and long duration storage capacity.

Another tender for short duration storage capacity (minimum two hours) was recently nearly trebled from at least 380MW to 930MW under a deal with the federal government which will herald the first rollout of the new Capacity Investment Scheme.

Construction has also started on the so-called Waratah Super Battery, which at 850MW and 1680MWh will be the biggest in the country and will act as a kind of giant “shock absorber” for the grid to allow more capacity to be transported over transmission lines and into major load centres.

Both the super battery and the expanded storage tender were recommended by the Australian Energy Market Operator to help meet any potential shortfall in the reliability standard after the closure of Eraring in 2025, and potentially Vales Point in 2029, although the owners of the latter plant say it can run for another three of four years.

The owner of Eraring, Origin Energy, may talk more about the future of Eraring when it releases its annual results on Thursday.