Synchronous condensors to boost network system strength and a contested compressed air energy storage project are set to be put on the fast-track under new rules to bring the New South Wales grid up to pace with the shift to renewables and the exit of coal.
The bill to amend the Electricity Infrastructure Investment Act 2020 was voted through the upper house of NSW parliament on Thursday, despite National Party opposition, following its passage through the lower house on Tuesday.
The changes to state legislation broaden the definition of a “priority network infrastructure project,” allowing NSW energy minister Penny Sharpe to streamline regulatory processes and direct network operators to deliver high-priority grid infrastructure projects.
The changes will also provide greater certainty and clarity on the development of projects that are essential for replacing ageing coal power plants and meeting legislated emission reduction targets.
“[This bill] amends the directions framework to empower the New South Wales government to respond efficiently to emerging reliability and system security issues, and to issue more targeted directions to support timely implementation of critical projects,” Sharpe told parliament on Thursday.
“This is also about enabling the revenue determination process to happen faster so that a project can be built and energy flows sooner.
“Importantly, the bill does not alter the fundamental architecture of the Electricity Infrastructure Investment Act, including the systems and safeguards which protect the interests of consumers and provide a clear and efficient regulatory framework for network operators and generators,” the minister added.
“Those systems and safeguards remain. Nor does the bill create new red tape. It simply adjusts existing mechanisms so they can best support an efficient and timely transition.
“As an example, it is estimated that the synchronous condensers that are needed to boost system strength in New South Wales could be in place 12 to 18 months earlier if they were able to proceed under the Electricity Infrastructure Investment Act,” Sharpe said.
In a speech introducing the bill, Sharpe noted the relative speed with which it has made its way through parliament – and the concerns some members had expressed about this. But “this is really urgent,” she added.
“We sought a declaration of urgency in the Legislative Assembly because some very significant decisions are coming up in the next six months as we respond to the challenges that have come through in the reports [from the Australian Energy Market Operator].
“Reliability is getting better as more renewable energy projects are beginning to get into the ground, but system strength is becoming a higher risk.
“The bill will allow the government and me, as minister for energy, to … basically pull forward projects in the pipeline that we know we need, enabling them to be delivered in a faster timeframe.”
“The bill is not about undermining the planning process. It is not about undermining the important community consultation we have done… The bill is about continuing that work as we complete what is a very complicated but necessary task.”
Sharpe says two tasks her department will try to address first under the new rules include boosting system strength through synchronous condensers, and ushering through the development of a long‑duration compressed air storage project in Broken Hill.
The 200 megawatt (MW), up to eight hour (1600 MWh) duration Silver City Energy Storage project by Canadian compressed air technology company Hydrostor won New South Wales development approval in late February, but has not had an easy path to development.
Along the way it has had to get around archaic energy market regulations and, just last month, the owners of local tourism business lodged an appeal in the Land and Environment Court challenging the state government’s decision to approve the project.
“It is really interesting,” Sharpe told parliament about the Broken Hill project on Thursday. “If we can make it work it is a real opportunity, given all the old mine sites out there.
“The project relies on air to provide long‑duration storage. That causes far less disruption than pumped hydro. It is a real opportunity. The bill will make sure that that project can go ahead earlier.
“The bill also deals with the back‑up generation that people in the far west absolutely need and will allow me, as energy minister, to direct Transgrid to do their work more quickly.”
Ultimately, the bill was passed by the Legislative Assembly with a vote of 28 to 10 in favour of the amendments – but not without some drama. The Liberals and Nationals split over the vote – the Liberals siding with Labor to support the bill while the Nationals voted against it.
In the lower house, the bill was introduced on the same day as a motion calling for members to affirm bipartisan support for the state’s net zero by 2050 emissions reduction target and to condemn federal National Party efforts – led by Barnaby Joyce – to undermine this position.
Following some debate, the motion was passed with such a large majority – no more than six votes against – that no formal count was needed. Only three “noes” were recorded from the 93 members of the Legislative Assembly – and none of them from NSW Nationals MPs.
Rather, the votes against came from three independents: Roy Butler, Helen Dalton, and Philip Donato. It is possible some of the 11 National MPs abstained from voting, but not one is on the record as voting against the motion.
