Is NSW serious about its support for renewables?

The New South Wales government has been getting some kudos from the environmental NGOs over its apparent support for the renewable energy target. But as we pointed out when its submission to the RET Review panel was released, there is a big difference between fine words and policy outcomes.

NSW recognised that the RET was a good policy. This is echoed by some fine contributions from Environment Minister Rob Stokes – such as in his excellent Op-Ed on rooftop solar, and his recent comments to the Community Energy Congress, where he said encouraging renewables were a “no-brainer”.

They may be a “no brainer”, but they will also be a “no-go” if the policy recommendations from the NSW government are put in place. NSW supports amending the target to a “real” 20 per cent target, rather than the current fixed target of 41,000GWh.

There are a  bunch of interpretations of what a “real” 20 per cent target actually is, but – as we suggested at the time – under the scenarios modelled by the Australian Energy Markets Commission – NSW renewable projects don’t get much of a look-in if the target is reduced in any form.

Frontier Economics, on behalf of AEMC, produced this graphic in support of the AEMC’ submission to the RET (The AEMC also wants the RET reduced to a “real” 20 per cent.

The modelling is clear – under changes to the RET that could see it cut to 30,000GWh, to 23,000GWH, or capped at its current output, NSW sees no new growth in renewables.

That’s because, Frontier notes, “wind investment decreases in the lower quality, higher cost sites first (i.e. NSW and QLD).”

Now, as we mentioned on Friday, we have a major problem with the Frontier modelling, because it has very high capital cost estimates for wind energy, and solar energy (double its actual price). That distorts the picture heavily, and we think it is perfectly ridiculous to assume that solar PV will not be competing with wind energy before 2020, and that no solar PV plants will be built out to 2030.

But it underlines the point that NSW needs to compete with other states to attract capital to its best sites, which probably have less good wind conditions than projects in other states. Which tells us that NSW’s fine words are meaningless if its policy recommendations mean no investment will occur in the state anyway. (Probably much to the relief of planning minister Pru Goward, who finds wind turbines “horrendous”.