This morning, the NSW Government announced that it will invest $1.2billion on transmission and energy storage infrastructure to facilitate the development of NSW’s Renewable Energy Zones (REZs).
This is an exciting and necessary step from the NSW Government that further highlights the urgency of building new transmission in the state.
NSW Treasurer and Energy Minister, Matt Kean, promoted the new Transmission Acceleration Facility, saying that it would fund the transmission infrastructure needed to connect new wind and solar projects to the grid. These new renewable energy generators are essential to replace the State’s ageing conventional thermal power stations.
NSW’s largest investment in renewable energy infrastructure to date is expected to help create 2,700 direct construction jobs across NSW, with the funding likely to be included in the upcoming NSW State budget.
Treasurer Kean also estimated that the Facility would drive $14 billion in private transmission infrastructure investment with all government contributions to be fully recovered.
Thus, it would seem that the facility is a loan making entity, similar to the Australian Government’s Clean Energy Finance Corporation (CEFC). The CEFC has been instrumental in assisting in the financing of major transmission projects previously, having provided up to $295 million in capital for Transgrid’s portion of Project EnergyConnect (PEC) which saw this $1.834 billion ($2017-18) part of the project proceed. The CEFC investment in PEC assisted TransGrid in financing the NSW portion of the new 330 kV interconnector connecting the energy grids of NSW and South Australia, with an additional link to North West Victoria.
Part of the funding will go towards paying for the Waratah Super Battery, which will be needed following the announced closure of Origin Energy’s 2880 MW Eraring power plant, in 2025, 7 years earlier than expected.
The NSW Government has previously announced that the Waratah Super Battery will be a 700MW/1400MWh grid connected battery. This battery will be the largest network standby battery in the Southern Hemisphere. The Waratah Super Battery, together with other minor transmission upgrades, will allow Sydney, Newcastle and Wollongong consumers to access more energy from existing electricity generation.
RE-Alliance expects that the remainder of the funding will assist in the development of the Central West Orana REZ, the New England REZ and the Hunter transmission project.
We agree with Minister Kean’s assessment that “Energy prices are up because of Russia’s invasion of Ukraine and unplanned outages at coal-fired power stations”, and that “fast-tracking the construction of renewable energy is the best way to reduce our exposure to these risks and take advantage of cheaper, cleaner power sources”.
Also vital to the timely roll-out of renewable energy developments and new transmission infrastructure are improved transmission company community consultation practices and increased landholder payment arrangements, additional to those required under the Land Acquisition (Just Terms Compensation) Act 1991. The NSW Government has been undertaking a review of compensation arrangements payable to landholders affected by new transmission infrastructure since late last year.
RE-Alliance hopes that there may be a further announcement of increased landholder payments in the Budget papers or shortly after the NSW Budget is handed down. Negotiations are already underway with landholders in the CWO REZ, and these landowners and their communities are keen to see increased and fair payment arrangements in place for those hosting new transmission infrastructure.