New South Wales is set to make its single biggest investment in renewable energy enabling infrastructure as soaring power prices accentuate the need for domestic supply as the state transitions to cleaner energy sources.

In its latest announcement, the New South Wales Government says it will allocate $1.2 billion over ten years in the upcoming budget to a Transmission Acceleration Facility.

The new facility will support the state’s planned rollout of renewable energy zones (see below).

It will fund development for transmission assets, back-up power supply and other infrastructure which is needed to support the state’s transition to renewable energy.

The announcement comes as New South Wales is scaling up renewable energy investment to both deliver on climate change commitments and shore up its generation capacity amid the looming closure of coal fired power stations.

On climate action, the state has set targets of 50 percent reduction in greenhouse gas emissions by 2030 compared with 2005 levels and net zero emissions by 2050.

On fossil fuel replacement, it needs to find new energy generation to replace coal-fired power in time for the closure of Origin Energy’s Eraring station in 2025 (seven years earlier than originally planned) and that of AGL’s Bayswater Plant in the Upper Hunter no later than 2033.

The Eraring plant is currently Australia’s largest coal plant and supplies 20 percent of NSW energy.

The announcement also comes amid a short term energy crisis which has seen energy costs spiral on account of the Ukraine war, coal plant outages and low renewable energy generation amid unfavorable conditions.

Whilst there are no easy short-term solutions, state and Commonwealth ministers last week agreed on reforms to create national transition plan out of fossil fuels, fund project to bolster the electricity grid through all weather conditions and empower the market operator to hold emergency stores of natural gas.

As part of its plan to transform its energy system, the NSW has committed to an Electricity Infrastructure roadmap, which has been given effect through the Electricity Infrastructure Investment Act (2020) which passed with bi-partisan support in December 2020.

A key part of the roadmap involves creation of renewable energy zones, which will group wind and solar power generation into locations where it can be efficiently stored and transmitted.

The zones will combine renewable energy generation such as wind and solar with backup storage such as batteries and high voltage poles and wires to transmit the energy across the state.

Five such zones are planned at Central-West Orana, New England, South-West, Hunter-Contral Coast and Illawarra.

The Central West and New England zones are expected to be delivered by 2030 with the other three zones to follow.

(NSW renewable energy zones (image source energyco.nsw.gov.au))

A mentioned above, the Transition Acceleration Facility will fund storage capacity and transmission lines which are needed to support the new zones.

The first such investment will be the Waratah Super Battery – a 700 MW standby network battery which will be the largest standby network battery in the Southern Hemisphere.

Warratah Super Battery

NSW Energy Minister Matt Keen says the Transition Acceleration Facility will support the fast-tracking of renewable energy zone development.

He says the facility will help to generate up to 2,700 direct construction jobs and will help to underpin private sector investment in transmission infrastructure worth up to $14 billion – something he says will ensure that all government contributions are recovered.

As things stand, Keen says there are more than 50 large-scale renewable energy projects totaling around 16,000 megawatts currently progressing through the NSW planning system.

But he cautions that many of these may not proceed without the additional capacity across the transmission network which the new facility will provide.

“Renewable Energy Zones are modern day power stations, providing cheap and clean power for the homes and business of NSW,” Kean said.

“This is the State’s largest ever investment in infrastructure for renewable energy and is expected to help create 2,700 direct construction jobs across the State.

“We estimate the Facility will drive at least $14 billion in private transmission infrastructure investment with all government contributions to be fully recovered.

“The Facility is a critical step in unlocking the new generation needed to improve competition, lower power prices and secure a brighter future for households and business.”

The NSW budget will be released on Tuesday, June 21.