NSW announces extra tender for more firmed renewables capacity to fill looming coal gap

New South Wales has unveiled plans to run an additional tender for firmed generation capacity, in a bid to plug any supply gaps left by the state’s retiring coal plants and cater to other possible risks, including “extended lulls” in renewable energy output.

So far, six tenders for Long-Term Energy Service Agreements (LTESAs) and renewable energy zone (REZ) Access Rights been completed under the NSW Electricity Infrastructure Roadmap.

Tender 6, the winners of which were announced earlier this month, has been hailed as the biggest and most successful battery tender of its type, both in terms of scale and number of projects, and also because of the falling costs of the technology and the bids.

The winning projects included the massive 300 megawatts (MW) and 3,500 megawatt hour (MWh) Great Western battery project, to be built by Neoen Australia at the site of the shuttered Wallerawang coal fired power station near Lithgow.

All are due to be completed by 2030, and some are supersized above eight hours of storage to ensure that the battery storage capacity remains at the required size (eight hours) for the duration of the 14-year contract, in case of degradation.

A seventh tender, seeking 500 MW of firming capacity, was launched in October, but state energy minister Penny Sharpe said on Wednesday that she has directed ASL (formerly AEMO Services) to undertake an additional firming tender to address further shortfalls identified in the recently released 2025 Energy Security Target Monitor report.  

The report shows that NSW has sufficient firm capacity until a forecast shortfall emerges in 2027-28 – a gap that is being addressed via Tender 7, which was launched in October and is seeking 500 megawatts (MW) of firmed capacity.

Following 2027-28, the report says sufficient firm capacity is maintained until another shortfall emerges in 2033-34 with the expected closure of the Bayswater and Vales Point power stations.

Sharpe says the new tender – which will also seek to tackle emerging challenges and reliability risks – will be in addition to Tender 7, with ASL currently undertaking additional modelling to determine its size and scope.  

“The NSW government has been abundantly clear that our number one priority is to deliver secure, reliable and affordable electricity, through a mix of renewable generation, storage and gas as ageing coal-fired power plants come offline,” Sharpe said in a statement. 

“The historic battery rollout marks an exciting milestone, but we can’t rest on our laurels. The latest ESTM report shows while we’ve made great progress, there’s more we can do. 

“That’s why we’re building a robust pipeline of projects to meet NSW’s future energy needs, mitigate any possible delays, and ensure value for money to take pressure off the hip pockets for electricity consumers.”