NSW could be dark horse of Australia’s renewable energy boom

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Federal energy minister Josh Frydenberg must feel a little friendless when he gets together with his state counterparts at the regular COAG energy meetings and looks around the room.

For a start, there are four Labor and Greens energy ministers – ACT (100 per cent by 2020), Victoria (40 per cent by 2025), and Queensland and Northern Territory (each 50 per cent by 2030) – with specific renewable energy targets far beyond the federal government

Then there is the new Labor energy minister in Western Australia, Ken Wyatt, who is yet to declare his hand, but who is likely to scupper the state subsidy for electricity which disguises the high cost of its fossil fuels. Renewables, and particularly rooftop solar, are likely to be the solution.

The Coalition states are not likely to be much help either. Tasmania wants a new Basslink so it can build more wind farms and export “baseload” renewables into the Victorian grid.

That leaves, NSW, the only mainland state or territory with a Coalition government and energy minister. It should be a strong ally – especially given that a year ago it was branded the worst place in Australia to invest in renewable energy. But appearances can be deceiving.

For a start, the NSW Coalition government now has one thing that the federal government no longer has – a long-term target (2050) to achieve zero net emissions for the state, including its electricity grid.

More than that, while it does not have its own state-based renewable energy target, it has high ambitions of its own that put it on a par with what has been achieved in South Australia, and what is being sought in Victoria, Queensland, and in the territories.

The Climate Change Fund Strategic Plan – unveiled as part of the NSW 2050 zero emissions target last October – openly canvasses a scenario where the state doubles its level of renewable energy to more than 10,000MW.

In written replies to questions submitted by RenewEconomy, new energy minister Don Harwin confirmed that target: “Our aspirational objective is to achieve net-zero emissions by 2050,” he said. “I believe it is feasible to double the state’s renewable energy capacity over the life of the (CCF) Plan (which goes to 2021).”

NSW renewable scenario

This graph above, which was first published last October, looks at how that might evolve. The yellow bar represents a big increase in the uptake of rooftop solar, both at household and business level, while the grey represents NSW share of construction under the federal RET.

The blue bar is interesting, because it represents what NSW might do over and above the RET, providing finance for a significant amount of new wind and solar to be built within the state.

There is now open talk that NSW will soon launch the first of two renewable energy auctions that will seek bids for a “contract for difference” (or CfD). There are suggestions that this could total 1,200GWh of renewable energy, equivalent to around 500MW of wind and solar capacity.

The CfDs could be based on the format used by the ACT government. Basically they undertake payments to a renewable energy developer to meet an agreed price, set by the auction process.

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If the prevailing wholesale price is below this level, then the renewable energy developers receive payments to make good the difference. If the wholesale price is higher, then the government receives the difference. The ACT government is already benefiting in this way, thanks to the high wholesale prices of recent months.

“The Renewable Energy Target is of great importance to the NSW government and we are currently looking at ways to grow renewable energy, which will boost and diversify the state’s electricity supply and increase energy security,” Harwin said, adding that the state was also looking to attract new technologies.

“To keep our energy supply reliable we need more advanced energy technologies being brought to market such as solar thermal, large-scale battery storage and smart grid systems.

“As part of the Plan opportunities for the NSW government to support demonstration projects for emerging advanced energy technologies were identified. I remain open to the innovative ideas from industry on how we can better incorporate energy storage into our system.

“The reality is that renewable energy sources such as the wind and the sun are naturally variable but when complemented with flexible and dispatchable sources such as pumped hydro, bioenergy, batteries and demand management, we can keep power bills in check and our lights on.”

The signs of interest are already evident. Last week, Transgrid said that expressions of interest representing 6,000MW of large-scale solar plants had been received. Of course, not all will be built, but much will. Transgrid sees the grid in 2050 being 65 per cent large-scale renewables, and 30 per cent local generation (namely rooftop solar and storage).

NSW has also played a key role in some of the major transition events that are currently occurring. One is the welcome to new Australian Energy Market Operator chief executive  Audrey Zibelman, who Harwin says “has had good exposure to the American grids that are undergoing this transition.”

The other is support to the so-called “5-minute rule” that advocates say will provide a big boost to fast-response battery storage technology, and dilute some of the distorting pricing power of the big gas generators.

It adds to the other initiatives already taken within the state, including a leading proposal for energy efficiency, and an initiative to encourage local business to source all of their electricity needs from renewable energy.  

  • Andrew Thaler

    I’m a little reluctant to believe that NSW has such solid bankable intentions to devlop and support RE.. the politics of NSW is rather fragile and likely to change at any instant..
    just like the Greyhouds and Council amalgamations we could see a backflip for any simple reason.. and the current premier does not have a a rock-solid grip on power.

    • Miles Harding

      At least, renewable energy transitions are fundamentally sound.

      • Mike Dill

        The bottom line is that RE is cheaper. Once that concept is accepted, business follows, and eventually the politicos follow.

        • Robin_Harrison

          I think energy overcharged business has already got it and are pressuring state politicians. The FF industry seems to have concentrated on buying federal politicians and neglected the state puppets on the same auction block.

    • Kevan Daly

      I agree with you; the capacity graph vs time lumps dispatchable MW in with intermittent MW and is, accordingly, very misleading. The interviews I’ve seen from Premier Berejiklian show her having a strong grip on financial issues and a Trumpian ignorance of everything else. At least she’s not pretentious.

  • Logical

    ZERO emissions???
    Who is fooling whom?
    We will still have petrol and diesel vehicles on the roads presumably AND NSW can’t approve enough expansions of or new coalmines.
    I smell an extremely large rat! This news is very thin on detail

    • neroden

      Why not go 100% electric vehicles? That’s what China’s doing…

  • Cooma Doug

    I will be able to go zero myself in 10 years. Electric car and home.
    I will eliminate all plastics. By then there will be artificial photo synthesis, garden things. Will take back the carbon I cant stop putting in the air with some products.

    The other option is to wait for the government and the PM to get serious. This will work too. Pollution will end with the human race.

    • neroden

      I’ll still be using fossil fuels in a few years, because my girlfriend prefers gas cooking.

      I should have removed all other fossil fuel uses by the end of this year. (I don’t think plastics are a problem; they aren’t a *fuel* use.)

  • brucelee

    I think the discussion on transport electrification needs to develop. RE electricity is approaching the point where government initiatives are only just keeping pace with market investment. However a government showing a transport electrification target (say 50% by 2050) and a plan to get there and some spending will start that rolling. In 5yrs it can snowball and then we can start talking about being 100% renewable transport.

  • solarguy

    Well it isn’t if 100% isn’t achievable, have the will, will do. However, I can’t see the Libs doing it.