NSW Labor promises $1 billion for new state-owned energy corp

New South Wales (NSW) Labor has promised to create the publicly owned NSW Energy Security Corporation (ESC) to work with private investors and industry to develop renewable energy assets that deliver cleaner and more reliable energy – if it can form government after the state election on March 25.

The ESC would be seeded with a $1 billion investment from the existing Restart NSW Fund, which was established in 2011 and uses money from the privatisation of public assets to reinvest in state infrastructure.

NSW Labor said the role of the ESC – announced less than three months after Victorian Labor leader Daniel Andrews announced a plan to revive state ownership of energy assets with the State Electricity Commission – will be to partner with private-sector parties to develop renewable projects that provide “affordable, accessible and reliable” energy to the state.

This would include medium- to long-duration renewable storage solutions such as pumped hydro, as well as community batteries to maximise the benefits of rooftop solar and any other commercially viable technologies to provide grid stability.

NSW Labor Leader Chris Minns said these areas are critical to managing the transformation of NSW’s energy system and providing the reliability the state needs but said the private sector has made it clear it is difficult to invest in these areas alone.

Minns said industry is driving investment in cheaper, cleaner generation from wind and solar but not enough has been done to ensure the dispatchable supply of clean energy needed “when the sun doesn’t shine or the wind doesn’t blow.”

“For 12 years, our electricity network has been sold off to the highest bidder without adequate investment in renewable energy,” he said.

“Labor’s Fresh Start Plan will stop any further privatisation of our energy assets. We will create the NSW Energy Security Corporation, a state-owned body that will accelerate investment in renewable energy assets to deliver cleaner and more reliable energy and help keep the lights on.”

Labor said the ESC will result in an overall expansion of the private sector renewable energy investment in NSW similar to the way the Commonwealth’s Clean Energy Finance Corporation (CEFC) has expanded total renewable energy investment across Australia.

“It won’t just create a more reliable grid. It will also invest in clean energy of the future, securing our energy market,” Minns said. “This is not a Band-Aid solution.”

The incumbent NSW government also promised to create a $1.5 billion Clean Energy Superpower Fund to fast-track energy projects, including energy grid security projects and community battery projects – if it is re-elected.

The superpower fund would combine the government’s existing $1.2 billion Transmission Acceleration Facility with an additional $300 million for renewable energy storage and grid security projects, such as pumped hydro and batteries.

The Coalition also plans to invest a further $23 million to expand its Electricity Infrastructure Roadmap to cover rooftop solar and small-scale batteries and to unblock local grid constraints to allow more people to produce and share energy locally.

NSW Energy Minister Matt Kean said there are currently 813,000 rooftop solar systems installed across the state, with this figure projected to grow to 1.5 million by 2030.

“Rooftop solar is a no-brainer to save money on energy bills but we know that tens of thousands of families can’t get the full benefit of their system because of network constraints which limit the amount of energy they can export to the grid,” he said.

“The Clean Energy Superpower Fund will bust through these constraints, helping to roll out the storage and network infrastructure that the grid needs to unlock the renewable energy of the future.”

Labor’s announcement was welcomed by the clean energy industry’s peak body, the Clean Energy Council (CEC), saying the initiative appears to have “struck the right balance … to ensure the state remains a beneficiary for private investors.”

CEC Chief Executive Officer Kane Thornton said the NSW government has helped the state become a “leading light in Australia’s clean energy transformation.”

“This, in turn, has made NSW an attractive location for private investors in renewable energy,” he said. “We would expect that by targeting areas of reliability, affordability and medium- to long-term storage, the public-sector contributions by the NSW Energy Security Corporation will help lower power prices, create jobs, keep the lights on and reduce our emissions.”

Thornton said the “global clean energy arms race” is intensifying and Australia needs to “boldly assert ourselves to secure a share of the massive green growth opportunity.”

“If we don’t act quickly, Australia risks missing out on the early mover advantages,” he said. “To that end, all investment – whether public or private – in Australia’s renewable energy sector is a welcome contribution.”