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Another state takes on the energy challenge

As our energy system shifts towards 21st century technologies powered by the wind and sun, it’s easy to get discouraged by the roadblocks placed in the way by the federal government. Whether its their refusal to guarantee ongoing funding for ARENA, the lack of foresight in not upgrading the transmission network to cope with the new wind and solar plants their own Renewable Energy Target brought online, or not working cooperatively with the states and regulators to keep energy markets and market rules up to date, there’s alot this climate change-shy government continues to do to impede progress to cleaner energy.

But now that wind and solar costs have reduced to the point where they stand commercially on their own, there’s less and less the government can do to stop them and there are plenty of other players in government and business who are ready to press ahead and secure the benefits of cheap, clean energy for their states and companies.

Matt KeanState and territory government policies like NSW’s Electricity Strategy, released by Energy and Environment Minister, Matt Kean, towards the end of last year, demonstrate how states and territories are getting on with the heavy lifting.

The strategy rests on the core liberal principle of using markets to provide the most benefits for the most number of people. It turns out some Liberal governments still believe in the power of the market when it comes to power stations.

It states the simple fact that firmed renewables are the cheapest form of new reliable generation. Because they are cheaper than the current wholesale price, greater uptake of wind and solar will keep prices in check as ageing coal-burning plants are retired. Firming technologies to complement variable wind and solar, such as pumped hydro and batteries will be supported by a $75 million Emerging Energy program. 

The strategy also acknowledges the risks to system reliability as ageing thermal plants fail more often, especially in the heat of summer when they are most needed. While a quicker retirement schedule for these climate change-fuelling plants is needed, together with a transition plan for impacted workers and communities, this is still a good start. Importantly, the strategy aims to create 1200 jobs, mostly in regional NSW.

The approach taken by the NSW government is to enable new generation by creating the right environment for new investment to take place and ensuring this generation arrives before old plants are replaced.

Early work on upgrades to transmission links to Queensland and Victoria is being underwritten by the government to speed up deployment of these two projects, which were identified as priority projects in the Australian Energy Market Operator’s Integrated System Plan (AEMO’s ISP).

But perhaps the most interesting part of the strategy is the development of a new 3,000 MW pilot Renewable Energy Zone (REZ). Based around Dubbo in Central West NSW, the REZ would produce enough energy to power up to 1.3 million homes each year. Renewable Energy Zones cluster wind, solar and pumped hydro plants in areas that have high natural resources and the best access to the grid. The 34 REZs identified in AEMO’s ISP are the key to harnessing our solar and wind resources in a way that is most efficient for consumers, so creating a successful pilot REZ could provide a template for how REZs are rolled out in other parts of the country. AWA is particularly keen to see these zones maximise benefits for local communities. 

Detail of this part of the strategy is still to come but it is a very promising direction that promises to deliver significant benefits to the Central West and a way forward for regional areas around the country.

While new transmission and generation investment will help bolster the state’s energy security, the strategy also promotes energy efficiency and peak demand reduction, avoiding building any more assets than are needed and keeping costs down.

Image credit: ABC

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