The New South Wales Labor Party says it will commit to building another 7 gigawatts of new large scale renewable energy capacity by 2030 if it is elected in March, and will do most of this through a series of reverse auctions.
The commitment announced by energy spokesman Adam Searle is the biggest ticket energy item announced to date, with expected investment of $9.5 billion. It is additional to Labor’s announced solar rebate scheme that will encourage another 2GW of rooftop solar in the state, taking the total additions of new wind and solar capacity to 9GW.
The current Coalition government matched that offer with its own loan based proposal, but is unlikely to match the large scale renewables uptake, dubbed by Labor as its “Plan for clean and cheaper energy.”
Searle told RenewEconomy that a Labor government would commit to 4GW of new renewables in the next four-year term, and would conduct the bulk (6GW) of the overall 7GW target through reverse auctions. The remaining 1GW would be built by a new government-owned entity that would compete in the market.
A Labor government would liase with the Australian Energy Market Operator on the rollout of the wind and solar projects, and consult on the level of “dispatchable” power that would be needed. That amount will be decided once the fate of the Sowy 2.0 pumped hydro scheme is finalised.
“NSW currently has a 13 per cent share of renewables, and we are way behind,” Searle told RenewEconomy, noting that it was the only state in the main grid that did not have a renewable energy target.
Victoria and Queensland both have 50 per cent renewable energy targets, ACT is aiming for 100 per cent and South Australia is already beyond 50 per cent. This policy, the largest single program of renewables investment, will take the state – Australia’s biggest consumer of electicity – to at least 40 per cent renewables.
NSW is expected to lose most of its coal generation over the next 10 to 15 years, with Liddell to close in 2022, Vales point and Bayswater and then Eraring over the subsequent decade, leaving Mt Piper near Lithgow as the only coal generator left in the system.
Because of this, AEMO has predicted that NSW faces the most dramatic energy transition of any state – but until now there has been no actual government policy to guide this. The NSW government has expressed support for AEMO’s Integrated System Plan and Transgrid’s push for new transmission, but has no over-arching policy framework.
AEMO and the CSIRO have also released analysis showing that new renewables, even paired with storage such as batteries or pumped hydro, are clearly the cheapest option to replace existing capacity that has to be retired.
Labor’s says the new “state owned corporation” will be tasked to deliver 1GW of renewable energy generation, and energy storage projects.
“This will create jobs and opportunities for apprentices and trainees (and ) give all citizens of NSW a stake in our state’s renewable energy future,” the policy document says.
It reverses years of privatisation, which saw the main generation assets sold to private players, including Liddell to AGL for an effective price of zero, and Vales Point to Sunset Energy for $1 million. Controversy has also surrounded the sale of most of the main networks.
“(It will) place the interests of consumers ahead of the need to generate higher profits (and) complement activities in the energy market by providing investment certainty for businesses which supply renewable energy technologies, such as solar panels and wind turbines.”
And it would “help to reverse” some of the negative consequences of the Liberals and Nationals privatisation agenda.
““I want to make NSW a global leader of the clean energy industry. I want NSW workers and families to reap the benefits,” Searle said in a statement.
“This (reverse auction) approach is already being successfully used in the ACT and in Victoria and overseas and the Queensland government is preparing for such a move.
“NSW cannot be a supplicant state for energy. We have to produce our own energy, create our own jobs and give energy security to our own people. If we don’t move now, we will completely fall behind and lose our advantage.”
NSW is also likely to have new and upgraded interconnections to neighbouring states, should the AEMO plan be implemented, and a proposed new connector from South Australia to NSW also goes ahead. ElectraNet, with the support of Transgrid, wants to build a $1.5 billion link that will have capacity of 800MW to trade power between the two states.
The move was welcomed by environmental groups and renewable campaigners.
“Commitments like this are what’s needed to turn NSW from a laggard to clean energy powerhouse,” said Joseph Scales, Solar Citizens’ National Director.
“NSW Labor has taken the first step and shown their hand, now it’s up to the LNP to raise the stakes so that investors can start making the most of NSW’s abundant sun and wind resources.”
The Smart Energy Council described it as the biggest rollout of renewable energy in Australia’s history,.
“This is an absolute game-changer,” said John Grimes, CEO of the Smart Energy Council.
“New South Wales will go from laggard to leader if the NSW Opposition’s commitment to 7 gigawatts of renewable energy by 2030, including 4 gigawatts in its first term, is implemented.”
“We are facing a climate change emergency and we need to do whatever we can to shift NSW’s energy network to renewable energy. NSW Labor has outlined a smart plan for a smart energy future with today’s announcement and last week’s commitment to 500,000 new solar homes.”
“The Smart Energy Council calls on the NSW Government to also support the rollout of seven gigawatts of renewable energy through reverse auctions. We look forward to continuing to work with all political parties to deliver smart energy policy.”
Energy Networks Australia, which represents investors and owners in grid infrastructure, also welcomed the target, but warned it needed a “plan”, by which it meant more investment in grid infrastructure.