NSW ramps up storage and firming needs before closure of country’s biggest coal plant

The New South Wales government is ramping up its search for new storage and firming infrastructure as it prepares for the closure of the country’s biggest coal generator in late 2025, and for the exit of most of its coal plants within a decade.

The government has revealed it will be seeking 600MW of long duration storage, as well as 380MW of “firming capacity” – likely to be new batteries – along with 950MW of new generation in the second tender to be held early next year.

The details were released by AEMO Services, which is co-ordinating the 10-year program of tenders and the creation of new renewable energy zones as part of the NSW Electricity Infrastructure Roadmap that is guiding the switch of the country’s most coal dependent state to renewables and storage.

The first of multiple tenders has already been set in motion, with first round offers closing late last month. That tender is also seeking 2,500GWh of new wind and solar, which is the equivalent of nearly 1GW of new capacity, plus around 600MW of long duration storage.

A shortlist of bidders from the first tender will be invited to submit detailed financial offers in January. The winners will be announced in late March.

Late Friday, AEMO Services revealed the heavy emphasis on storage and firming capacity in the second tender that will be held in the second quarter of calendar 2023.

It flagged in August that the state it will be looking for around 380MW of “firming” infrastructure located in the Sydney-Newcastle-Wollongong sub-region, and that it wants this in place by the summer of 2025/26, so it can meet summer peaks after the expected closure of the 2,800MW Eraring coal plant in late 2025.

This will now be included in the second tender, along with the 2,500GWh of new generation, equivalent to around 950MW of new capacity depending on the mix of wind and solar.

Further information about the type of technology, and the storage duration, will be released later this month, but it is likely to be focused on battery storage.

It will also seek up to 600MW of long duration storage, although the final number will depend on how much storage is awarded in the first tender currently under way.

“(Long duration storage) LDS tenders are planned to occur annually, however there is an option to undertake a contingent tender should the need arise,” it said in a statement.

“In this case we are planning an LDS tender to complement the firming tender because LDS and firming infrastructure can service similar functions in terms of reliability.”

The fast-tracking of the long duration storage and the additional “firming” capacity highlights the pressing need to have back ups in place as the pace of coal exits accelerates.

NSW has already announced it is building the Waratah Super Battery – a 600MW, 1480MWh battery that will primary purpose is to allow increased amount of generation to be delivered to customers in the major load centres.

Origin is also building its own battery at Eraring, which could be as big as 700MW/2800MWh when complete, but it will likely be built in stages as the market needs and opportunities evolve.

AEMO Services says the firming capacity added to the second tender will likely be located in the Sydney-Newcastle-Wollongong sub-region will be eligible to participate, and the 380MW size if only indicative.

Details of the eligibility criteria for the firming tender – including duration – will be released soon and made available on its website as part of its market briefing Series.

“The tender has been specifically designed to address an identified need arising from the earlier than previously scheduled retirement of Eraring Power Station, which is reflected in both its timing and the location of infrastructure to be contracted,” the company noted.

“This announcement reflects the flexibility of the Roadmap in response to the changing environment around energy supply in New South Wales, and does not affect the inaugural tender for generation and long-duration storage currently underway.”