NSW Energy Infrastructure bill passes with a bonus Hunter REZ

Weekend weather in New South Wales was like a gnashing One Nation objection to the momentous passing through State Parliament of Energy and Environment Minister Matt Kean’s Electricity Infrastructure bill on Thursday night. Temperatures soared into the 40s and power lines fell in furious hot winds, but the bill, which will support more than $32 billion of investment in renewable energy generation, storage and transmission in the state, including development of a newly declared Renewable Energy Zone in the Hunter Region, had received support from both major parties, with Ministers working through almost 250 amendments posed by One Nation’s Mark Latham in his efforts to thwart its passing.

Twitter channels are full of admiration for Kean and his team, who have shown foresight and tenacity in bringing the Australian Electricity Market Operator’s vision for planned Renewable Energy Zones (REZs) — aggregations of renewable plant, supporting storage, and transmission development — to regional NSW.

For ABC Radio Newcastle, Kean couched the win in terms of replacement of coal generation that has reached the end of its natural life, and in terms of stimulating investment and seeding competitive manufacturing and industrial advantage in the region.

“We are changing the game…We’re creating 9,000 new jobs between now and 2030. We’ll require $58 billion worth of investment between now and 2040, to modernise that electricity system; and we’ll deliver some of the cheapest energy you’ll find anywhere in the world, which will give us a competitive advantage here in New South Wales for those energy intensive industries.”

Renewing the Hunter region as an energy powerhouse

The addition of a Hunter-Central Coast REZ to the development pipeline for NSW goes beyond AEMO’s identification of the most cost-effective REZ sites in its 2020 Integrated System Plan, but local representatives have strongly lobbied the government to include the region which must provide a transition pathway for workers currently employed in coal mining and fossil fuelled power generation.

On November 21, the Member for Terrigal and Parliamentary Secretary for the Central Coast Adam Crouch jumped the gun on the previously unheralded REZ announcement, in the Coast Community News — at that time it was merely a line in the bill that gives the Minister the power to declare Renewable Energy Zones, and slotted the Hunter-Central Coast in as follows:

The Minister is to declare the following as renewable energy zones— 

(a) Central-West Orana, 

(b) Illawarra, 

(c) New England, 

(d) South West,

(e) Hunter-Central Coast.

Number five is live!

This makes the Hunter-Central Coast the fifth “declared” zone as of Thursday night, with planning work so far having only commenced on the 3 GW Central-West Orana and 8 GW New England REZs.

Crouch said in advance of the bill being passed: “Four of the five power stations in NSW will come to the end of their operational life in the next 15 years. This will disproportionately impact the Central Coast and Hunter regions and our existing skilled energy generation workforce, but establishing this REZ will create hundreds if not thousands of new jobs.”

On Friday, Kean told ABC Newcastle, “The Hunter has been at the heart and soul of our energy industry for generations, and as a result of this bill that went through the parliament last night, that will continue to be the case for generations to come.”

Details of a proposed Hunter-Central Coast REZ are not yet available, but Kean told the ABC that existing transmission and distribution infrastructure serving the Hunter Region’s Bayswater and soon to retire (2023) Liddell would allow the state to “put new generation in place in the Hunter area, delivering that infrastructure, creating those jobs, and driving down those electricity prices”.

Coast Community News reported that the Government would now commence detailed scoping works for the Hunter-Central Coast REZ, “including consideration of existing transmission links and generation capacity”. 

But what about Federal gas aspirations for the Hunter?

Asked whether the newly declared REZ is at odds with the Federal Government’s determination to build a gas-fired power plant in the Hunter if the state’s generators cannot show plans for 1000 MW of new dispatchable energy to be available by the time Liddell closes, Kean told ABC Newcastle, “It doesn’t put us at odds with the Commonwealth at all… In fact our plan in NSW sees a pathway forward for new generation, new storage and new firming. Technologies like gas are going to be critically important to support those renewables that will be coming into the system.”

He said the NSW Government is working closely with the Federal Government on NSW energy security, and referred to the $3 billion Memorandum of Understanding signed between the parties in February this year, which last week saw development of  gas in the NSW Narrabri Basin given the final go ahead by Federal Environment Minister, Sussan Ley.

On Radio National on Friday, Kean explained, “Gas has a role to play in generating electricity, but it’s a very expensive way to do that. The reality is that most gas consumption in NSW, in fact over 80% of it, is used for manufacturing, heating and residential use — not electricity. The Narrabri project is about providing gas to meet other industrial and manufacturing needs.”

Advancing the main game — renewable energy

Overall, Kean said, “We see our future as having cheap, reliable, clean energy, that will not only deliver lower prices for people in NSW, but will set us up to have a competitive advantage as we move towards a low-carbon economy.”

Next step, according the new bill, is for “the Minister is to establish a board for the NSW renewable energy sector, in particular in relation to the operation of the sector and the manufacture and construction of infrastructure in the sector”.

The board will include representatives from relevant unions, manufacturers of metals, especially steel and aluminium, “persons involved in the planning, design, construction and operation of generation infrastructure” and NSW electricity customers.

It will develop a Plan for the NSW renewable energy sector, setting out how to maximise the use of locally produced and supplied goods and services, maximise the employment of suitable qualified local workers and foster opportunities for apprentices and trainees as the state creates conditions for investors to build out 12 GW of new large-scale solar and wind generation and 2 GW of pumped hydro by 2030.