The NSW energy minister Matt Kean has urged Australia’s investment community to support new energy projects and drive the energy transition in the state, and predicts that renewables, coupled with storage or fast-start gas generators, will replace the state’s ageing coal plants.
“Here in New South Wales, we have a government that is pro-business and pro-investment,” Kean told the Investor Group on Climate Change (IGCC) summit in Sydney on Monday.
And, in comments that you won’t hear often from the Coalition at federal level, Kean added:
“Changes to the Earth’s climate are being rapidly accelerated by human activity. This change poses a material risk to our prosperity and our way of life.
“Responding to climate change isn’t green-washing as some critics allege, it’s prudent management for business and government alike”.
The Investor Group on Climate Change represents some of Australia’s largest investment managers, including many of Australia’s largest superannuation firms.
Investors have come under growing pressure to account for the risks posed by climate change to their investments and to redirect their investments in fossil fuel companies and towards supporting new renewable energy and storage projects, and to align their portfolios with the Paris Agreement goals of limiting warming to no more than 2 degrees,
Financial regulators have issued advice to both investors and company directors that there is a growing risk of legal liabilities for failing to pro-actively respond to the financial and physical risks posed by climate change.
NSW is the only Australian state without a specific target for renewables uptake. The state has however set a target of achieving zero net emissions by 2050, which the Berejeklian government has leaned upon to provide the market with a signal to invest in zero-emissions sources of energy.
Kean says he is confident that existing market signals are working, citing the types of projects that are currently in the development pipeline in NSW, with the overwhelming majority of proposed projects coming from renewable energy and zero emissions storage technologies.
“NSW intends to lead the nation when it comes to dealing with the issue of climate change. We will do so decisively, but we will do so responsibly,” Kean told the summit.
“Right now, the energy industry is telling me that [ageing coal] power stations will be replaced with renewable energy in combination with gas and emerging storage technologies. Not because Governments are forcing that to happen, but because the economics are driving it.” Kean added.
The minister drew attention to the 19,285MW of large-scale renewable energy projects that have received planning approval. Kean also pointed to the fact that there are just 1,410 MW of new fossil-fuelled power stations in the development pipeline, most of which are gas-fired generators.
With the 2,000MW Liddell power station expected to be shuttered by 2023, the NSW Government says it is confident that there will be sufficient investment to fill any potential supply gap and that it will be filled by renewable energy and storage projects.
The NSW government recently committed funding to support the completion of preparatory work for 21 different large-scale energy projects across New South Wales. The projects receiving grants to complete pre-feasibility or feasibility studies represented a mix of pumped-hydro, battery storage and renewable energy generation projects.
The comments from a Liberal Party energy minister stand in contrast to his federal counterpart who described the ambitious targets being pursued by State governments in lieu of federal government leadership as “policy insanity”, despite investors repeatedly calling on the Coalition Government to end the prolonged period of policy uncertainty in Australia.