NSW won’t rule out slippages to coal closure timetable, as first turbine deliveries highlight lack of new projects

New South Wales energy minister Penny Sharpe has kept open the possibility of further changes to coal generator closure dates, as the state continues its race to build enough capacity to transition the country’s biggest state grid from fossil fuels to renewables.

Uncertainty over closure dates has been cited as a major reason for the struggle to get finance for new wind and solar projects, along with the almost total refusal of the country’s major utilities – who also own most of the remaining coal fired power stations in NSW and Victoria – to invest in or contract with new wind and solar.

NSW has already negotiated two extensions to the closure date for the country’s biggest coal generator, the 2.8 gigawatt Eraring facility, and there is continued speculation in Victoria that the Yallourn coal generator will also be extended beyond its June, 2028 closure date, despite the insistence of its owners that this won’t happen.

Sharpe told the National Renewables in Agriculture conference in Orange on Wednesday that the share of coal in the NSW grid has fallen from 80 per cent of the state’s electricity needs 10 years ago to 50 per cent now, with four coal fired generators left after the closure of Liddell in 2023.

“Those coal-fired power stations are old and they’re not going to be replaced,” Sharpe said, but added: “We will continue to make hard decisions about having to extend them where they need to be, but that is not the most efficient way, and it’s not the most efficient way.”

At a media scrum immediately after the speech, Sharpe sought to downplay the significance of those remarks when asked about them by Renew Economy.

“I wouldn’t read too much into that,” Sharpe said. “The point is that in NSW we have private coal-fired power stations, and they have got closure dates which we expect them to meet. I’m just simply flagging the fact that we had to … work with Origin Energy in relation to Eraring for a period of time.

“We’re trying to manage coal out as we put renewables in. It’s going pretty well and it’s not my expectation that we’ll be extending coal fired power stations. It’s more that we need to manage it carefully … and get the renewables done as quickly as possible.”

AGL said on Wednesday that it would stick to its closure date for Bayswater in NSW, but that is not due until 2033, and most eyes are on Eraring and the Vales Point generator, whose closure timeline has also slipped.

The main problem for NSW – apart from the inability to control the closure dates because they don’t own the facilities – is the lack of new wind projects under construction. Solar and battery projects are advancing well, but wind has struggled despite a huge pipeline of projects.

This is at least partially due to the lack of investment and contracts from the owners of the remaining coal fired power stations – Origin Energy (Eraring), AGL Energy (Bayswater), EnergyAustralia (Mt Piper), and Czech-based Sev.en Global Investments (Vales Point).

Sharpe and premier Chris Minns have long lamented the lack of state ownership of generator and retailer companies enjoyed by Queensland and Western Australian.

In Queensland, that has allowed the LNP government to deliberately slow the renewables transition, abandon renewable and emissions targets, and rip up plans of the previous Labor government to close fired power generators.

But in W.A. the state Labor government has a firm closure date and now has more new wind farms under construction than any other state because the state owned utility has written firm contracts.

In NSW, only one wind farm, Squadron’s 414 MW Uungula project is currently being under construction, and where the first turbine blades arrived on site this week after a 400 km road journey. Sharpe was on her way to visit the project site on Wednesday, along with the Orana big battery.

Sharpe said the NSW planning regime had been a major impediment. “It’s been too slow. We inherited wind guidelines that really were designed to make building wind farm as hard as possible,” she said. “There’s been a huge amount of work in the three years that I’ve been energy minister … to really try and streamline that.

“We are seeing more projects being approve and coming out of the system, which is very welcome. I’ve currently got a piece of legislation in the parliamnt that would actually help us prioritise some of these projects, butwe are not yet there yet.”

Sharpe also pointed to changes in the state tender process, which as renew Economy has reported, are designed to help projects reach financial close without having to rely on off-take agreements, and the potential role of the new state green bank, the Energy Security Corporation.

She said data centres are also a potential opportunity, and they will be required to enter power purchase agreements, and this could help projects get over the line.

“We are doing the industrial revolution in about 15 years,” she said earlier in the speech. “We are at the tipping point. it has been slow and frustrating and we do need to improve, but we I think we can actually do that.

“We need to understand how far we have come in a short period of time… there are big challenges here …. there are some people in your communities who wish the energy transition would go away. We don’t have the luxury of doing that.”

Sharpe announced that farmers in the Central-West Orana Renewable Energy Zone will soon be able to apply for grants of up to $35,000 each as part of a new $1.4 million Smart Farming Program.

The grants will cover up to 70 per cent of the cost of technologies that improve productivity, efficiency, safety, and business resilience – including soil and water sensors, drones, livestock and crop monitoring tools, electric fencing monitoring, site security platforms and fuel tank sensors.

The initiative forms part of the NSW Government’s $128 million investment in community benefits for the Central-West Orana REZ, where Sharpe said the first 40 transmission towers have now been erected.

To join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, click here to subscribe to our free daily newsletter.

To support independent media, and combat AI slop, you can click here to make a one off donation or become a regular supporter of Renew Economy.

e