NSW shortlists 4.3GW of wind, solar and storage projects in first renewables auction

The New South Wales state government says it has shortlisted 16 projects comprising more than 4.3 gigawatts of generation and storage capacity in the first of more than a dozen auctions designed to underpin the switch of the country’s biggest coal grid to renewables.

State treasurer and energy minister Matt Kean says that bids for more than 4.3GW of generation and long duration storage will now be assessed by AEMO Services under the inaugural tender for the NSW Electrity Roadmap.

NSW is looking for more than  $32 billion of new investment to cover the retirement of all, or nearly all, of the five remaining coal generators in the state over the next decade.

Auctions will be held twice a year until 2030 at least to ensure enough replacement capacity is built in time. The state government is aiming for 12GW of new renewables and at least 2GW of long duration energy storage.

The government did not reveal any further information about the nature of the short-listed projects, or the ration of wind and solar, or battery or pumped hydro. The storage projects need to meet a criteria of at least eight hours storage.

“This is a promising start to the $32 billion in private capital we expect to see through our 10-year schedule of rolling competitive tenders,” Kean said in a statement.

“The state’s nation-leading roadmap will ensure that NSW households and businesses have clean, reliable and more affordable electricity for decades to come.”

The winning projects will be awarded long-term energy service agreements that will underpin the modernisation of the state’s electricity system. They will provide a minimum return to ensure that they can get finance to build their projects.

AEMO Services chair Dr Paul Moy said that the selected projects have been identified as those currently best placed to support the NSW electricity transition and will now proceed to a financial value assessment.

“AEMO Services has rigorously and independently assessed each of these projects against a set of criteria covering a wide range of factors including technical capability, deliverability and social licence,” he said in a statement.

“We are pleased with the selected shortlist and encouraged by the pipeline of projects that will compete in future tenders.” 

The shortlisted projects have until February 10 to submit their financial value bids and AEMO Services executive general manager Paul Verschuer said unsuccessful projects from the current tender round would have the opportunity participate in future rounds. 

“We expect proponents to bid aggressively, recognising the value of the investment opportunities presented by the Roadmap and the unique features of our LTESA contract,” he said.

“We’ve designed the process to facilitate repeated applications at minimum cost to project proponents, and those projects now have the chance to update and improve their bids for the next tender round, scheduled to take place in around six months’ time.”