The state of New South Wales (NSW) is facing a significant gap between its 2030 emissions reduction targets and the current pace of renewable energy deployment, posing a challenge for Australia to meet its national goals, according to a new report by Green Energy Markets.
The report highlights that NSW, with the largest gap among the states, would need to generate 33,600 gigawatt hours of renewable energy by the end of 2029 but is currently less than halfway to that goal. The report emphasizes the importance of addressing this performance gap, as NSW plays a crucial role as the “chokepoint” in the national transition away from fossil fuels.
The report indicates that Queensland and South Australia also face capacity shortfalls, with Victoria nearing its target and Western Australia already having enough projects to meet its goals. The Albanese government’s 82% renewable energy target for the grid by 2030 is considered challenging, especially as the federal goal exceeds the ambitions of individual states.
Tristan Edis, a senior analyst at Green Energy Markets, stresses the need for planners to reassess their approach in NSW, urging them to reconsider the pace of renewable energy approvals. While NSW has managed power grid challenges in the recent summer, the upcoming closure of the Eraring coal-fired plant in 2025 poses additional concerns, as discussions about an extension are ongoing.
The NSW government, led by the Minns Labor government, has highlighted efforts to accelerate project approvals, with numerous renewable energy projects in the pipeline. However, there are concerns within the renewables industry about delays in planning approvals, with changes in conditions after approval and challenges related to curtailment targets eroding the value proposition for renewable energy projects.
The report concludes by emphasizing the pivotal role of NSW in the national transition and the importance of addressing the challenges to ensure the success of Australia’s renewable energy goals.
Despite New South Wales’ (NSW) current challenges in meeting its renewable energy targets, there are ongoing efforts by the Minns Labor government to expedite project approvals. The government has approved 18 significant wind, solar, and battery projects in 2023, with an additional 29 renewable energy projects currently under assessment. A spokesperson from the planning department mentioned that they aim to determine up to 50 new energy projects in 2024, collectively contributing up to 25 gigawatts of generation and storage capacity.
However, concerns have been raised within the renewables industry, with some asserting that NSW is the worst among the states and territories for planning approvals. There are reported discrepancies in approval times, with NSW Planning Minister Paul Scully stating an average approval time of 67 days, while a Clean Energy Investment Group report suggests longer timelines for solar farms, battery projects, and wind farms. The disparities in these figures underscore the complexities and challenges faced by the state in streamlining the approval process for renewable energy projects.
A senior executive in the renewables industry, who preferred to remain anonymous, raised specific issues related to changes in conditions after project approvals. The executive pointed to draft wind energy guidelines that could trigger retrospective alterations, impacting the state’s renewable energy zones initially designed to streamline developments. Additionally, concerns were voiced about the eroding value proposition of projects, citing curtailment targets that were altered in a way that could deter future investment.
For instance, in the Central West-Orana zone, the curtailment target increased significantly from 0.3% in December 2021 to 4.37% in 2022, even before considering limits outside the zone. Critics argue that such changes undermine the attractiveness of renewable energy projects, especially when generators are asked to pay substantial amounts for access to a network with uncertain curtailment levels.
The spokesperson for EnergyCo, the agency overseeing NSW’s electricity plan, defended the revised curtailment figure of 4.37%, stating that it better reflects typical curtailment in economic modeling across the National Electricity Market (NEM). According to the spokesperson, this figure aims to optimize network efficiency in the interests of electricity consumers.
The challenges faced by NSW highlight the complexities involved in balancing the rapid transition to renewable energy with the need for effective planning, clear guidelines, and consistent conditions to attract and sustain investment in the sector. As the state plays a pivotal role in Australia’s broader energy transition, addressing these issues becomes crucial for achieving both state and national renewable energy targets.
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