NSW green bank to target batteries, pumped hydro and VPPs to fill gaps in transition from coal
The New South Wales state government says it will target investment in battery storage and long duration storage solutions such as pumped hydro with its newly created green bank, known as the Energy Security Corporation.
Energy minister Penny Sharpe unveiled the first investment mandate for the ESC, which has been seeded with $1` billion in funds.
Sharpe said the key priorities for investment include co-investment in short to long-duration storage projects that capture excess renewable energy, to maximise use of electricity generated from solar and wind.
Both NSW and Victoria – two states that have largely privatised their energy assets – have created new state owned bodies as they race to fill in investment gaps in their transition from coal to renewable dominated grids.
Victoria has a target of 95% renewables by 2035, so it needs the capacity built to replace its last three brown coal generators at Loy Yang A and B and Yallourn.
NSW has a fleet of four remaining black coal generators, but all are expected to close within a decade, with two – Eraring and Vales Point – likely closing within the next five years.
In NSW, it has been expected that long duration storage would be a focus of the newly created ESC given the difficulties of getting pumped hydro off the ground through the recent tender processes.
Pumped hydro has been unable to compete with battery projects and even new technologies such as advanced compressed air in recent tenders, possibly because of growing civil construction costs and lengthy timelines.
But a number of pumped hydro projects have emerged as potential candidates, including those put forward by EnergyAustralia, AGL, Atco, and Alinta.
The state government statement identified four technologies that would be the focus of co-investment: large scale batteries, community batteries, pumped hydro, and virtual power plants.