4.3 GW of generation and storage makes shortlist in NSW renewables auction

AEMO Services has shortlisted 16 projects comprising more than 4.3 GW of generation and storage capacity which will now proceed to the next stage in the inaugural competitive tender as the New South Wales (NSW) government continues to implement its Electricity Infrastructure Roadmap.

The Roadmap, launched in 2020, seeks to bring at least 12 GW of renewable energy generation capacity and 2 GW of long-duration storage online by the end of the decade as the state prepares for the exit of its coal-fired generators. Auctions are to be held twice a year until 2030 at least to ensure enough renewables capacity is built to support the transformation of the state’s energy system.

AEMO Services, which is administering the tender process in its capacity as NSW Consumer Trustee, received bids for more than 8 GW of generation and storage projects in response to its first auction.

Those projects have now been trimmed to 16 comprising more than 4.3 GW after what AEMO Services Chair Dr Paul Moy said was a rigorous and independent assessment against a set of criteria covering a wide range of factors including technical capability, deliverability and social licence.

Moy said the shortlisted project have been identified as those currently best placed to support the NSW electricity transition and will now proceed to a financial value assessment. This assessment will identify the projects that meet the criteria of being in the long-term financial interests of NSW electricity consumers.

“A key part of our task as consumer trustee is ensuring that the most promising projects, in terms of quality and efficiency, receive support to bring new energy infrastructure to market sooner than would otherwise have been the case,” he said.

Moy said the interest in the tender demonstrated the value of the investment opportunities available under the Roadmap.

“We are pleased with the selected shortlist and encouraged by the pipeline of projects that will compete in future tenders,” he said. “We expect competition to intensify over time as the Renewable Energy Zones are developed, and as the market continues to deliver new solutions to the energy transition.”

AEMO Services Executive General Manager Paul Verschuer said the shortlisted projects would now have to demonstrate long-term financial value.

“Those projects which clear this financial value assessment will be recommended for long-term energy service agreements (LTESAs) to support market entry,” he said. “We expect proponents to bid aggressively, recognising the value of the investment opportunities presented by the Roadmap and the unique features of our LTESA contract.”

AEMO Services said short-listed projects could submit their financial value bids by 10 February 2023.

Verschuer said projects that are unsuccessful in the current tender round will be able to participate in future rounds.

“We’ve designed the process to facilitate repeated applications at minimum cost to project proponents, and those projects now have the chance to update and improve their bids for the next tender round, scheduled to take place in around six months’ time,” he said.