NSW electricity generation and storage tender sparks 8 GW response

The New South Wales (NSW) government’s first tender seeking generation and storage projects as part of the state’s Electricity Infrastructure Roadmap had attracted significant interest from wind, solar and storage developers with more than 5.5 GW of generation projects and more than 2.5 GW of long-duration storage projects received.

AEMO Services, which is administering the process in its capacity as NSW Consumer Trustee, announced it had received more than 5.5 GW of wind and solar generation projects and more than 2.5 GW of long-duration storage projects covering technologies such as pumped hydro, lithium-ion batteries, hydrogen fuel cells and compressed air storage. The portfolio of projects is enough to power the equivalent of 2.4 million homes.

NSW Energy Minister Matt Kean said the level of interest is an outstanding result for the government’s long-term plan to modernise the state’s electricity system.

“This is an overwhelming response from the market and a strong endorsement of the roadmap’s vision for the NSW electricity system,” he said in a statement, before adding that Russia’s invasion of Ukraine and the global energy crisis had given “extra impetus to modernise our electricity system. The need for new sources of electricity generation that are not tied to the volatility of global commodity prices has never been greater.”

Kean’s position is that the best way to provide structural, long-term relief from skyrocketing electricity bills is to drive new generational supply.

The first tender is seeking about 950 MW of wind and solar, along with 600 MW of long-duration storage. The tender is designed to select projects capable of delivering new large-scale energy infrastructure as the NSW government looks to implement its Roadmap for at least 12 GW of renewable energy generation capacity and 2 GW of long-duration storage, defined as a minimum eight hours of storage, online by 2030 as the state prepares for the exit of its coal-fired generators.

AEMO Services Executive General Manager Paul Verschuer said bids for the generation and long-duration storage tenders will now be independently assessed according to a set of merit criteria which evaluate the deliverability of the project, the quality of the proponent and social licence, before being assessed for financial value.

“We recognise there is an increasing need for additional energy generation and storage,” Verschuer said. “Our tenders are designed to drive competition from projects that are able to deliver that energy in the interests of NSW electricity consumers.”

Verschuer added that while the tender had an indicative size of 950 MW of generation and 600 MW of long-duration storage, AEMO Services “can recommend greater or less capacity than this size if it is in the long-term financial interests of consumers to do so.”

Successful projects will be awarded long-term energy service agreements, underwriting the delivery of built energy resources that will benefit the long-term interests of the state’s electricity consumers.

This tender round is the first in a biannual schedule that will continue for the next 10 years, open to eligible projects located anywhere in NSW. The second tender is expected to commence in the second quarter of 2023.

“These tenders have been specifically designed to identify the best projects to bring quality energy to market in the earliest possible timeframe,” Kean said.