NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...

NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
NSW Department of Planning, Industry and Environment

NSW Electricity
Building an Energy Superpower
November 2020

NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
The NSW Electricity Infrastructure Roadmap                             economic opportunities associated with
    was informed by advice from a range of                                 the reforms.
    leading energy market advisers. Specifically,                      • NAB supported the Department with a
    the NSW Department of Planning, Industry                             review and evaluation of the weighted
    and Environment (the Department)                                     average cost of capital (WACC) used by
    commissioned consultancies to help advise                            Aurora when determining the cost of new
    on the development and assessment of                                 investment in the energy sector.
    specific policies identified and proposed by
                                                                       • Aurora supported the Department with all
    the Department.
                                                                         aspects of the energy market modelling
    • KPMG was engaged to analyse the core                               including long term wholesale energy price
      policies developed and proposed by the                             forecasts and consumer prices associated
      Department which have been summarised                              with the policies.
      in this document. Additionally, KPMG                             • The Office of the Chief Scientist and
      was engaged to prepare a report on the                             Engineer led the work on future industrial
      industry opportunities to identify broader                         and economic opportunities associated
                                                                         with the policies.

    The work of all advisers has been provided to the Department of Planning, Industry and Environment according to an agreed scope of
    works and subject to the limitations outlined in each advisers report and terms of engagement.

Find out more

Title: NSW Electricity Infrastructure Roadmap

Subtitle: Building an Energy Superpower Overview

First published: November 2020

Department reference number: ISBN 978-1-76058-412-2

Cover image: Solar farm at Dubbo, NSW. Image courtesy of Neoen.

© State of New South Wales through NSW Department of Planning, Industry and Environment 2020.
You may copy, distribute, display, download and otherwise freely deal with this publication for any
purpose, provided that you attribute the NSW Department of Planning, Industry and Environment as the
owner. However, you must obtain permission if you wish to charge others for access to the publication
(other than at cost), include the publication in advertising or a product for sale, modify the publication,
or republish the publication on a website. You may freely link to the publication on a
departmental website.

Disclaimer: The information contained in this publication is based on knowledge and understanding at
the time of writing (November 2020) and may not be accurate, current or complete. The State of New
South Wales (including the NSW Department of Planning, Industry and Environment), the author and
the publisher take no responsibility, and will accept no liability, for the accuracy, currency, reliability or
correctness of any information included in the document (including material provided by third parties).
Readers should make their own inquiries and rely on their own advice when making decisions related to
material contained in this publication.

2   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
Minister’s foreword
Minister’s foreword                                                                                                    4

Executive summary                                                                                                       6

The energy superpower vision                                                                                            8

Why we need a Roadmap                                                                                                  10

Why we need to act now                                                                                                 11

What is the Roadmap?                                                                                                   12

The future of electricity in NSW                                                                                       12

Pillar 1: Regional NSW - the State’s powerhouse                                                                        14

Pillar 2: Delivering energy storage infrastructure                                                                     18

What is the Electricity Infrastructure Investment Safeguard?                                                           24

Pillar 3: Delivering Renewable Energy Zones                                                                            26

Pillar 4: Firming                                                                                                      32

Pillar 5: Opportunities for industry                                                                                   34

Additional information                                                                                                 44

              NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview    3
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
Minister’s foreword
                                                              Our electricity system has served us well, but it
                                                              is under increasing pressure. Most of our power
                                                              stations are coming to the end of their lives and
                                                              need to be replaced. We need new sources of
                                                              power to help our State grow.

                                                              Making sure that we build our modern grid at
                                                              the lowest cost and in places that work for our
                                                              regional and rural communities is an absolute
                                                              priority of the NSW Government. New energy
                                                              infrastructure needs to support, rather than take
                                                              away from, our communities. If we don’t act
                                                              now, we are going to become heavily dependent
                                                              on electricity imported from other states, risk
The Hon. Matt Kean MP                                         years of higher electricity prices in NSW or see
Minister for Energy and Environment                           development in the wrong places.

                                                              Instead, we can use our world class regional
                                                              dams to build pumped hydro power stations that
                                                              work hand in hand with cheap solar and wind
                                                              power. We can locate these projects in places
                                                              that help our rural and regional communities, and
                                                              we can encourage the private sector to build the
                                                              lowest cost generation needed to replace the
                                                              closing power stations.

4   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
NSW has an enormous opportunity if we act now.                             This means lower electricity bills for households
The NSW Government has a vision to deliver                                 and businesses. This means cheap, low carbon
some of the cheapest, most reliable and cleanest                           electricity that our industries need to thrive
energy in the world.                                                       into the future.

The private sector sees the potential in NSW                               This plan will drive an estimated $32 billion in
and has signalled it is ready to invest with over                          private investment to 2030 and support an
120 large-scale energy generation projects                                 estimated 6,300 construction jobs and 2,800
already in the pipeline, totalling over $25 billion in                     ongoing jobs, mostly in regional NSW in 2030. It
potential investment.1                                                     will also provide a competitive advantage in low
                                                                           cost, clean energy, re-industrialising the State and
The NSW Electricity Infrastructure Roadmap
                                                                           attracting even more investment, jobs
will provide on-the-ground benefits for
                                                                           and innovation.
regional communities who have been doing
it tough with drought, bushfires and the                                   NSW is faced with an important choice: to be
COVID-19 crisis. This plan will not only help                              left behind as the world transitions to a low cost,
us recover, but also set our State up to be                                low carbon future, or set ourselves up to be a
an energy and economic superpower.                                         State where new industries thrive and jobs and
                                                                           wealth are created.
Our plan will deliver three Renewable Energy
Zones, pumped hydro schemes and generation                                 The NSW Government thinks the choice is clear.
to power our economy, day and night, for
decades to come.                                                           The Hon. Matt Kean MP
                                                                           Minister for Energy and Environment

1.   As of October 2020. Based on project information on the NSW Planning Portal and Major Projects register.

                    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview       5
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
Executive summary
NSW is at a crossroads. As our existing power                            4. Keeping the grid secure and reliable:
sources come to the end of their lives and global                           backing the system with gas, batteries or
markets seek cleaner, cheaper and more reliable                             other reliable sources as needed.
energy sources, we have a once in a generation                           5. Harnessing opportunities for industry:
opportunity to redefine the State as a modern,                              empowering new and revitalised industries with
global energy superpower.                                                   cheap, reliable and low emissions electricity.
Timely action to deliver the electricity                                 The Roadmap is a coordinated framework to
infrastructure of our future—pumped hydro,                               deliver that modern electricity system. It is
Renewable Energy Zone (REZ) generation, firming                          a whole of system approach to deliver new
and transmission—can unlock internationally                              generation, transmission, long duration storage
competitive energy prices to grow the economy,                           and firming.
support jobs, and attract major new industries.
The scale of potential benefits is substantial:                          This Roadmap will set us ahead of global trends,
around $32 billion in private investment and an                          keeping our industries competitive—and attracting
estimated 6,300 construction jobs and 2,800                              new ones—with forecast NSW heavy industry
ongoing jobs in 2030.2                                                   electricity prices indicatively expected to be
                                                                         in the lowest 10 per cent of the Organisation
The NSW Electricity Infrastructure Roadmap is our                        for Economic Co-operation and Development
plan to transition the electricity sector and seize                      (OECD).3 It will make it cheaper to do business
those opportunities. It is a decisive step down the                      at all scales, saving the average small business
path towards thriving regions, a revitalised and                         an estimated $430 (small business bills) a year
re-industrialised economy, and better livelihoods                        on electricity bills. It is also expected to directly
for all NSW citizens.                                                    improve NSW livelihoods, with estimated savings
                                                                         of around $130 a year for the average household
Our modern electricity system will be built on five
                                                                         electricity bill. The Roadmap will set NSW apart
foundational pillars:
                                                                         as a true global leader delivering the electricity
1. Driving investment in regional NSW:                                   infrastructure needed to support a modern,
   supporting our regions as the State’s                                 prosperous economy.
   economic and energy powerhouse.
2. Delivering energy storage infrastructure:
   supporting stable, long-term energy
   storage in NSW.
3. Delivering Renewable Energy Zones:
   coordinating regional transmission and
   renewable generation in the right places for
   local communities.

2. All ongoing jobs estimates include on-site and off-site employment generated through investment in electricity generation and storage
   infrastructure. Source: University of Technology Sydney, Institute for Sustainable Futures, Renewable Energy Employment in Australia:
   Methodology, June 2020.
3. NSW Department of Planning, Industry and Environment calculations based on data from: International Energy Agency, World Energy Prices
   2018, May 2018.

6    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
                                                      A wind farm near the town of Dalgety, NSW.

NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   7
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
The energy superpower vision
Our vision is for NSW consumers to enjoy some                             Our regions will be the State’s powerhouse.
of the cheapest, cleanest, most reliable energy in                        They will see an estimated $32 billion by 2030
the world. This will make NSW one of the most                             in significant development opportunities arising
attractive places to start and grow a business,                           from electricity infrastructure investment and new
while our households will spend less on electricity                       jobs. We will open the door for new low carbon,
bills and can invest more in themselves.                                  energy intensive industries to compete in global
                                                                          markets, and attract modern industries to our
Under the Roadmap, we estimate average
                                                                          regions. This will be done in a way that supports
industrial electricity prices to fall to around
                                                                          our farmers and landowners, with lease payments
USD$84 per megawatt hour (including grid costs)
                                                                          from infrastructure helping to drought-proof
—placing NSW prices in the cheapest 10 per cent
                                                                          the regions.
of OECD jurisdictions.4 Unlocking our abundant
clean energy resources ensures we can also                                Becoming an energy superpower requires a clear
meet growing international investor and market                            plan and consistent signals to the energy sector.
demand for new, low carbon industries. With the                           The Roadmap is the NSW Government’s plan to
estimated 3 gigawatts (GW) of firm capacity by                            do just that.
2030 under the Roadmap, we can also ensure this
supply is reliable.

Meanwhile, we estimate households will pay, on
average, $130 less a year on their electricity bills
from 2023 to 2040. Small businesses are expected
to save an average of $430 (small business bill
savings) a year on their electricity bills over the
same period.

     All estimates of private investment, transmission capacity, jobs, bill savings, pricing
     and related outcomes are based on indicative development pathway forecasts developed by
     Aurora Energy Research for the Department. The Consumer Trustee, once appointed, will publish
     a detailed plan on the development pathway and the long term interests of consumers.

4. Based on International Energy Agency (IEA) industrial energy price information for 2018 collated for the OECD, and KPMG and Department
   analysis of delivered energy costs for a small industrial customer in NSW. NSW costs based on wholesale and scheme cost forecasts from
   Aurora Energy Research prepared for the Department with adjustments for equivalence with IEA prices. NSW prices include network costs for
   a typical customer using 10 gigawatt hours a year in the Ausgrid network area with an 80 per cent load factor and a 3 per cent retailer margin
   and existing NSW and Commonwealth schemes (e.g. Large-scale Generation Certificates, Small-scale Technology Certificates, Energy Savings
   Certificates, Climate Change Fund). Foreign exchange rate based on five year average.

8    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
Icons – Page 12

    Icons   – investment
      Attract  Page 12in industries of                                           Booming NSW regions
        the future

                             Top 10 for lowest industrial                                          $32 billion in regional energy
                             electricity prices across                                             infrastructure investment expected
                             the OECD.                                                             to 2030.

                             $200 million opportunity                                              6,300 construction jobs and 2,800
                             per year in Gross Domestic                                            ongoing jobs expected in 2030,
                             Product (GDP) growth from                                             mostly in regional NSW.
                             national hydrogen industry
                             by 2030.

                             $20 million opportunity                                               $1.5 billion in lease payments
                             in annual revenue for every 1%                                        estimated by 2042 to landholders
                             increase in ‘green’ steel output.                                     hosting new infrastructure where
                                                                                                   communities want it and in a way
                                                                                                   that supports farming.

        More for small businesses                                                More for NSW households

                             Forecast $430 a year                                                      Forecast $130 a year
                             saving on an average small                                                saving on an average
                             business electricity bill from                                            household electricity bill
                             2023 to 2040.                                                             from 2023 to 2040.

        Reliable energy                                                          Clean energy

                             3 gigawatts                                                               90 million tonnes
Department of Planning, Industry and Environment
                            of firm  capacity1                                                         of reduced carbon
 Department of Planning, Industry and Environment                                                                  Department of Planning, Industry and E
                             estimated by 2030.                                                        emissions to 2030.

    1                                                                  Department of Planning, Industry and Environment

        Note: The estimates above represent expected benefits of the NSW Electricity Infrastructure Roadmap based on available information at the time
        of this report.

Department of Planning, Industry and Environment

                          NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview                    9
NSW Electricity Infrastructure Roadmap - Building an Energy Superpower Overview NSW Department of Planning, Industry and Environment - Energy ...
Why we need a Roadmap
With some of the best natural energy resources
in the world, NSW is in a unique position to
                                                                                   According to AEMO, the cheapest
benefit from emerging low cost technologies like
                                                                                   replacement is a mix of wind, solar,
wind, solar, batteries and pumped hydro. Global
                                                                                   storage, gas and transmission.5
investors are poised to invest in clean, reliable
and affordable infrastructure if we get the market
settings right.
                                                               By providing the right investment environment,
By acting now, we can ensure NSW continues to
                                                               we create a substantial economic opportunity for
enjoy reliable electricity supply into the future
                                                               NSW. We can create a competitive advantage for
as our power stations approach the end of their
                                                               local businesses in the production of low cost,
operational lives over the next 15 years. A clear
                                                               low emissions energy with heavy industry hubs,
and coordinated Roadmap can drive investment
                                                               infrastructure and skills, to support low emissions
in new electricity infrastructure where we need it,
                                                               fuel and material production.
coordinating new generation without congesting
the grid, delivering cheaper energy to households
and businesses, and providing new jobs and
industries for our regions.

The Roadmap can unlock economic opportunities
                                                                                   Expected power station
—optimising our water infrastructure through
                                                                                   retirements in NSW
pumped hydro, growing our regional communities
through coordinated development where locals
welcome it, and implementing a world class
                                                                                                                          Liddell retires
grid. We will be putting the State on the path to
                                                                Forecast capacity reduction from

becoming one of the lowest cost, lowest carbon                                                                                                 Vales Point B
                                                                  retiring power stations (MW)

regions in the world.
This Roadmap takes action to seize                                                                                                                           retires

these opportunities.                                                                               6,000
The NSW Government is committed to getting                                                                                                                          to retire
the settings right to deliver the electricity
infrastructure we need. This will put into action                                                  2,000
the commitments made in the NSW Electricity
Strategy and complement the NSW Government’s                                                           0











household and small business energy initiatives.

We will make the reforms needed to properly
coordinate generation, transmission, storage and                        Source: AEMO
                                                                             Source: AEMO, 2020 Integrated System Plan, July 2020.
firming investment at the time and scale needed.
For consumers, coordinated development means                                       Four of the five NSW coal power stations,
lower construction costs, a more reliable system,                                  accounting for three quarters of NSW’s
greater bill savings and fewer price shocks. For                                   electricity
                                                                                    6          supply, are expected to close in                                                           Depar

businesses, it makes NSW the best and easiest                                      the next 15 years.
place in which to invest and grow.

5. CSIRO, GenCost 2019-20, May 2020.

10    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
Why we need to act now
Keeping costs down and ensuring ongoing                               when average NSW electricity prices increased by
reliability means taking action now to deliver new                    60 per cent after power station closures in South
electricity infrastructure.                                           Australia (Northern) and Victoria (Hazelwood).6

The backbone of our current electricity system                        The cheapest replacement infrastructure we need
took 30 years to build and commission. Almost all                     has long construction times. It can take up to
of it was built by Government.                                        10 years to build a Renewable Energy Zone and
                                                                      eight years to build a large pumped hydro project.
Four of the State’s five existing coal fired power
stations are expected to close within 15 years,                       The status quo encourages investors to wait
starting with the Liddell power station in 2022-23.                   for high price signals before committing to
These power stations currently provide around                         new projects. This leaves a long delay between
three quarters of NSW’s electricity supply and                        rising prices and new generation or storage
two thirds of the firm capacity we need during                        coming online, in the meantime leaving our State
summer heat waves. As those power stations get                        vulnerable to price spikes and electricity shortfalls.
older, they also start to fail more often, creating
                                                                      Strategic planning and committed engagement
reliability problems.
                                                                      are also critical to ensuring new private sector
If we take action to coordinate and unlock                            led investment. This will allow for new generation,
investment before they close, households and                          transmission and storage to be built before power
businesses will benefit from stable electricity                       stations close over the next 15 years in order to
prices and supply, avoiding issues that occurred                      avoid a rapid increase in prices.

    The infrastructure needed to replace power stations has long lead times

     Source: AEMO, 2020 Integrated System Plan, July 2020.

6. AEMO, National Electricity Market Data Dashboard, www.aemo.com.au/energy-systems/electricity/national-electricity-market-nem/data-nem/

                 NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview                11
What is the Roadmap?
                                                                                                                                                           The five pillars of our Roadmap:
The NSW Electricity Infrastructure Roadmap is
                                                                                                                                                                           Regional NSW - the State’s
the NSW Government’s plan to deliver the major                                                                                                               1             powerhouse (pages 14-17)
infrastructure needed to modernise our electricity
system and power our economy.
                                                                                                                                                                           Delivering energy storage
Under the Roadmap, consumers will benefit from                                                                                                              2              infrastructure (pages 18-25)
low cost, clean electricity generation backed up
by 24 hour power sources. To do this, weSnowy
                                           areMountains Hydroelectric Scheme,        NSW.
                                                                                  Delivering Renewable Energy
getting the investment settings in NSW right for                     3     Credit: iStock
                                                                                  Zones (pages 26-31)
the private sector to compete to deliver the new
infrastructure we need at the lowest cost.
                                       Snowy Mountains Hydroelectric Scheme, NSW.
The Roadmap complements other NSW
                                                                     4Credit: iStock
                                                                                  (pages 32-33)
Government initiatives that are already helping
NSW households and businesses to reduce their                                                                                                                              Opportunities for industry
energy use and save money on energy bills,                                                                                                                  5              (pages 34-43)
including the Energy Security Safeguard, Solar
for Low Income Households and Empowering
Homes programs.

The future of                                                                                            Cheaper electricity under the Roadmap
electricity in NSW                                                                                                                                    $140
                                                                                                      Average wholesale electricity price ($/MWh)

                                                        Average wholesale electricity price ($/MWh)

The NSW Government has a vision for our                                                                                                                $120
future that will deliver cheap, reliable and                                                                                                        $120
                                                                                                                                                                          Average $73 per MWh
clean energy that powers the economy.                                                                                                                            Average $73 per MWh
That means giving households and                                                                                                                       $80
businesses access to cheap electricity,
revitalising regional areas with an influx of                                                                                                       $60
investment and jobs and attracting new
industries and businesses to NSW.                                                                                                                                                     AroundAround
                                                                                                                                                                                             $50 per$50
                                                                                                                                                                                                     MWhper MWh

This future also means a more reliable
electricity system while we transition to new,                                                                                                       $0 $0

cleaner energy sources that will deliver on

our ambition of net zero emissions by 2050.
                                                                                                                                                     Forecast   electricity  prices
                                                                                                                                                                          price      under
                                                                                                                                                                                s unde        thessBusiness
                                                                                                                                                                                       r B usine    as Usua l as Usual scenario
                                                                                                                                                          Forecast electricity price s unde r B usine ss as Usua l
                                                                                                                                                     sce nario
                                                                                                                                                         sce nario
                                                                                                                                                      Forecast electricity prices under
                                                                                                                                                               electricity prices underthe
                                                                                                                                                           Forecast electricity prices under Roadmap
                                                                                                           Source: Aurora Energy Research forecasts prepared for
                                                                                                           the Department.

12   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
                                                Snowy Mountains Hydroelectric Scheme, NSW.

NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   13

                                                                                                         Icons – Page 1

Regional NSW - the State’s powerhouse
                                                                                                      Icons – Page
Through the coordinated build out of electricity              The Renewable Energy Zones will also help
infrastructure under the Roadmap, we can                      drought-proof farming communities, providing
deliver growth and long term jobs where our                   new income streams for landholders that host
communities need it most. Our Renewable Energy                energy infrastructure. We will also encourage
     Icons – Page 12
Zones and pumped hydro sites have the potential               investors to build renewables in places and ways
to deliver a huge boost to local communities.                 that support farming.

Host communities could also benefit from                      To ensure lasting benefits beyond construction,
improvements to their distribution networks,                  the NSW Government will work to attract energy
connecting them with the low cost, clean                      intensive industries, such as minerals processing,
electricity generated locally.                                IT and data centres, agriculture, manufacturing or
                                                              food processing to be co-located with the new
Major energy infrastructure projects will bring jobs
                                                              energy infrastructure.
to the regions with flow on benefits, including
improvements to roads and telecommunications.

                      An estimated                                   Around
                      $32 billion                                    6,300 regional
                      private investment                             construction jobs
                      in energy infrastructure                       expected in 2030.
                      by 2030.

                      $1.5 billion in                                New
                      lease payments                                 agricultural jobs
                      by 2042 estimated for                          through intensified
                      landholders choosing                           cultivation and food
                      to host electricity                            manufacturing supply
                      infrastructure.                                chain opportunities
                                                                     unlocked by
                                                                     cheaper energy.


14   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
                                           Workers inspecting wind farm near Bungendore, NSW.

NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   15
Case study
Renewables and agriculture

Tom Warren is a sheep farmer from Dubbo. Since
2017, he has hosted a 55 hectare solar farm on his
property which is owned and operated by Neoen.
Tom’s farm is an example of the benefits that can
be realised through co-locating agriculture
                                                                  Grazing of sheep, of the
and renewables.
                                                                  appropriate breed, and solar
Tom grazes his Merino wether sheep on the                         farming can co-exist without
land under the tracking solar panel system. The                   a problem whatsoever, and
condensation that runs off the solar panels in the                with a net benefit overall to
mornings helps to keep the grass growing, and                     the community and also to
provides a food source for his sheep, while the                   the owner of the land and the
panels themselves provide shade for the sheep in                  owner of the sheep. It’s a win-
the warmer months. Tom is a firm believer in the                  win. An absolute win-win.”
benefit of multi-purposing farming land, for the
                                                                  Tom Warren
benefit of both farmers and renewable
energy producers.

     Solar farm at Dubbo, NSW. Image courtesy of Neoen.

16   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
By supporting the coordinated build out of energy
infrastructure, the Roadmap can provide new
                                                                    Energy Corporation of NSW
investment, growth and long term jobs in
the regions.                                                        The interests of local regional communities
                                                                    will also be a core consideration of the
Under the Roadmap, new energy projects will
                                                                    Energy Corporation of NSW, the entity
not only compete to generate low electricity
                                                                    responsible for coordinating the delivery
prices, but also on how they will deliver the best
                                                                    of the Renewable Energy Zones in the
outcomes for local communities. This includes
                                                                    Central-West Orana, New England and
commitments for how they will:
                                                                    South West NSW.
• improve local employment and
                                                                    The Energy Corporation will take a
  business opportunities
                                                                    holistic view of Renewable Energy Zone
• ensure compatibility and complementarity                          infrastructure delivery. This includes
  with existing agricultural land uses                              engaging with communities to understand
• maintain strong local community engagement                        local expectations and realising on-the-
  and support for their project.                                    ground benefits.

Regions hosting Renewable Energy Zones                              The Energy Corporation will seek to
can also benefit from improved                                      achieve a balance between electricity,
telecommunications capacity, leveraging                             agriculture, heritage, visual amenity, mining
the ability for telecommunications infrastructure                   and other land uses within the proposed
to be co-located with transmission lines.                           Renewable Energy Zones. It will also
                                                                    be able to restrict network connection
Improvements to local electricity distribution
                                                                    of projects over 30 megawatts (MW)
networks could allow regional communities to
                                                                    in Renewable Energy Zones where
directly benefit from the cheap, clean electricity
                                                                    reasonably necessary to maintain social
produced locally in Renewable Energy Zones.
                                                                    licence, such as where projects would be in
                                                                    close proximity to towns and face strong
                                                                    local community opposition.

   Forecast construction and ongoing jobs

   Source: Forecast jobs figures were calculated using the methodology in University of Technology Sydney, Institute for
   Sustainable Futures, Renewable Energy Employment in Australia: Methodology, 2020.

              NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview       17

Delivering energy storage infrastructure
                                                                       Energy storage infrastructure—such as batteries
Ensuring 24 hour power                                                 and pumped hydro—allows renewable energy to
While renewables are the cheapest and                                  be stored and then released on demand when it
cleanest form of new generation, they rely on                          is needed, creating stability and reliability in the
environmental factors—like sun and wind—to                             electricity system.
produce electricity. Sometimes, like when the sun
is shining and the wind is blowing, these natural
resources are abundant. Other times, less so. This
means renewables need to be backed up by long
duration storage, to ensure power is available at all
times when it is needed.

     How storage ‘firms’ renewables 7

      1 Wind and solar can produce abundant energy, but not always when we need it. The figure above is a hypothetical
     example of how batteries and pumped hydro can ‘firm’ renewables by storing excess energy when demand is low, like
     in the middle of the day, and releasing it when demand is high, like in the evening as people return home from work
     or school.

7. Chart is illustrative only, based on typical generation profiles.

18     NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
Pumped hydro
                                                                     Pumped hydro projects will stimulate
One of the most effective and reliable forms of                      regional NSW economies through
long duration storage is pumped hydro—when the                       construction and operation, supporting
sun’s not shining and the wind’s not blowing, the                    jobs and attracting new industries.
water runs down a hill through massive turbines.

It works by running water from an upper reservoir            Pumped hydro is a proven form of large scale
to a lower one through a turbine to generate                 energy storage technology used across the world
electricity. When cheap, clean energy is available,          to produce reliable electricity.
water is pumped back to the upper reservoir.
Here it is stored, ready to be released and
generate electricity when needed. It can also
provide inertia and important services to
support electricity grid stability.

How a pumped-storage hydroelectric power station works

  1.                                          2.                                           3.
  Water is pumped into                        When there is a spike in                     The water flows quickly
  the upper reservoir using                   demand, or a drop off in                     down the pipes which
  cheaper energy when                         wind or solar generation                     turns the turbines to
  demand is low or there is an                —even for a short time—                      generate power.
  excess of renewable energy                  energy is called for and
  because the sun is shining                  the water is released.
  and the wind is blowing.

                                                       Electricity                                  Upper
                                                          grid                                     reservoir

                                                                                     Pump up to
                                                                      Release flow
                                                                                     store water
                                                                      to generate
                     Lower                                            power

                                               Power station
                                            (turbines & pumps)

             NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   19
The Australian Energy Market Operator’s (AEMO)                               However, the costs of feasibility studies can be
Integrated System Plan finds that by the mid-2030s,                          prohibitive for developers. Furthermore, projects
NSW will need about 2.3 GW of energy storage                                 can take, on average, eight years to plan and build.
with four to 12 hours of duration to maintain
                                                                             Given the long lead times and upfront costs, the
system reliability and security.8 This is in addition
                                                                             NSW Government is taking action now to provide
to the new 2 GW of capacity at Snowy 2.0 being
                                                                             the support that is needed to ensure pumped
developed by the Commonwealth. NSW needs to
                                                                             hydro projects are built before the closure of
invest in more pumped hydro infrastructure.
                                                                             existing power stations to deliver reliability in the
As highlighted in the NSW Pumped Hydro                                       energy system.
Roadmap, NSW has considerable potential for
pumped hydro projects and the private sector
is ready to invest.

Working with the Australian National University, the NSW Government mapped
20,000 reservoirs in the natural landscape that could be used as storage for pumped
hydro energy as part of the NSW Pumped Hydro Roadmap.9

                                                                                          North East
                                                                                          4,350 reservoirs
                                                                                          35,250 possible schemes
                                             Lower North Coast
                                                                                          22.6 TW of opportunities
                                             3,350 reservoirs
                                             16,750 possible schemes
                                             9.2 TW of opportunities

                 Central West
                 1,500 reservoirs
                 5,600 possible schemes                                                                                             Armidale            Coffs Harbour
                 2.2 TW of opportunities


              Broken Hill

                                   950 reservoirs                                                                                   Newcastle
                                   2,550 possible schemes                                      Orange
                                   1.3 TW of opportunities



                                                                         Wagga Wagga
 Riverina                                                                                      Canberra

 2,350 reservoirs
                                                                                                            Batemans Bay
 10,600 possible schemes                                                                                                                        Legend
 5 TW of opportunities                                                                         Cooma                                            National Park
                                                                    Albury                                                                          Opportunity Score
                                                                                                                                                            7 - 10
                                           South East
                                                                                                                                                            10 - 12.5
                                           1,850 reservoirs
                                           13,900 possible schemes                                                                                          12.5 - 15
                                           9.1 TW of opportunities                                                                                          15 - 17.5

                                                                                                                                                            17.5 - 20

NSW Pumped Hydro Roadmap.

8. Australian Energy Market Operator, 2020 Integrated System Plan, July 2020.
9. NSW Government, NSW Pumped Hydro Roadmap, December 2018.

20     NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
                                                  Hume Dam, NSW. Image courtesy of WaterNSW.

NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   21
What action are we taking?
The NSW Government will support the development of lowest cost energy storage by getting the
settings right to encourage private sector investment.

  1                                                              2

Electricity Infrastructure                                     Pumped Hydro Recoverable
Investment Safeguard –                                         Grants Program
long duration storage                                          Developing pumped hydro infrastructure has a
The NSW Government will reform the electricity                 high degree of financial risk because of the lack
infrastructure investment market by creating the               of detailed subterranean information, meaning
Electricity Infrastructure Investment Safeguard.               complex feasibilities studies are required.
A Consumer Trustee will be appointed to protect
                                                               The Pumped Hydro Recoverable Grants Program
the long-term interests of consumers.
                                                               will provide grants to developers to assist with
The Consumer Trustee will run competitive                      the cost of early stage, detailed project feasibility
processes on behalf of consumers to award                      studies for new pumped hydro projects.
Long Term Energy Services Agreements. These
                                                               The program will allow the initial project risks to
Agreements will provide investors with the
                                                               be shared between the NSW Government and
long-term certainty they need to lower the cost
                                                               developers and provide a runway to support
of electricity.
                                                               projects that otherwise may not be advanced
The first limb of the Electricity Infrastructure               enough to compete in the Infrastructure
Investment Safeguard involves a clear                          Safeguard market. If a project moves to the
Development Pathway for long duration storage                  construction phase, the grant will be repaid to the
projects—like pumped hydro—to balance out the                  NSW Government.
higher penetration of variable renewable energy.
                                                               A budget of $50 million will be available to
This will maintain the reliability and security of our
                                                               support up to 3 GW of pumped hydro projects,
electricity supply.
                                                               with an estimated 1 GW of undeveloped greenfield
The Consumer Trustee will follow an investment                 land and around 2 GW of previously developed
objective for long duration storage of 2 GW by                 brownfield land projects.
2030 (in addition to Snowy 2.0) and as otherwise
                                                               Three pumped hydro projects have already been
needed to support the State in maintaining
                                                               awarded grants in the first round of the NSW
reliability over the medium term while keeping
                                                               Emerging Energy Program to assist with early
downward pressure on energy prices.
                                                               stage development activities. This next round will
                                                               provide larger funding amounts to fast track
                                                               more development work needed to build these
                                                               types of projects.

22    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
Case study
Snowy 2.0

Snowy 2.0 is a project to expand the original                          Snowy 2.0 will be critical to the future security
Snowy Mountains Hydroelectric Scheme with an                           and reliability of our energy system and will put
additional 2 GW of electricity generation capacity                     downward pressure on electricity prices through
and 350,000 megawatt hours of energy storage.                          providing much needed generation capacity and
Producing enough power for 500,000 homes, it                           energy storage, reducing our reliance on more
will link the Tantangara and Talbingo Reservoirs                       expensive forms of generation.
with a 27 km tunnel and a new power station that
will be around 1 km underground.10

                                                     Tumut Hydroelectric Power Station, Snowy Mountains, NSW.

10. Australian Government Department of Industry, Science, Energy and Resources, Pumped hydro,

                NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   23
What is the Electricity Infrastructure
Investment Safeguard?
The Electricity Infrastructure Investment                     A Consumer Trustee will be appointed to run a
Safeguard (Infrastructure Safeguard) is an                    competitive process to offer Long Term Energy
investment signal to deliver the new electricity              Services Agreements to projects on behalf of
infrastructure NSW needs.                                     consumers. The Agreements will drive investment
                                                              in projects that align with identified needs and
The Infrastructure Safeguard provides a
                                                              provide investors with certainty.
framework for technologies to compete to deliver
the energy services they are best placed to                   In this way, the Infrastructure Safeguard will
deliver, including:                                           provide a pathway for the delivery of low-cost,
                                                              reliable energy infrastructure.
• Renewable Energy Zone generation
• long duration storage                                       The Infrastructure Safeguard will also support the
                                                              NSW Energy Security Target while striking the
• firming.
                                                              right balance of technologies to replace our retiring
                                                              power stations and support local communities.

Operation of Long                                             The Consumer Trustee
Term Energy Services                                          The Consumer Trustee is responsible for

Agreements                                                    protecting the interests of consumers. It does this
                                                              by finding the best Long Term Energy Services
The nature of each Long Term Energy Services                  Agreements for consumers. In order to make sure
Agreement will depend on the type of project                  electricity retailers are able to secure long-term
and identified need. For Renewable Energy Zone                contracts, the Consumer Trustee will be allowed
projects, the Agreements give generators the                  to on-sell any energy services purchased through
option to sell their electricity at an agreed price.          the Infrastructure Safeguard to retailers or NSW
Options contracts give generators assurance of a              companies. It can also require contributions from
minimum price for their electricity, while                    distribution network businesses to cover any of
a competitive process maximises value                         its remaining costs. While those contributions are
for consumers.                                                added to network charges, consumers are the
                                                              ultimate beneficiaries of lower electricity prices
For long duration storage projects, Agreements                under the Infrastructure Safeguard.
will give projects the option to receive an
availability payment. This provides revenue                   The Consumer Trustee will be responsible for
assurance for the term of the Agreement and                   following infrastructure investment objectives
ensures long duration storage projects are built              and determining the design and schedule of
to keep the grid reliable. If a shortfall in the NSW          competitive processes to award Long Term
Energy Security Target is forecast, Agreements                Energy Services Agreements.
can be used to support the delivery of firm
generation to meet the State’s reliability needs.

24   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
Putting consumers first                                 • ensuring sufficient capacity in the system to
                                                          keep the lights on when demand is high.
The Infrastructure Safeguard has been
designed to ensure new energy infrastructure            Long Term Energy Services Agreements give
optimises benefits for consumers at lowest              investors confidence by providing assurance
cost and risk. It will do this by:                      of a competitively set minimum return.
                                                        However, under the Infrastructure Safeguard,
• encouraging new, low cost projects                    payments are only likely to be triggered if
• keeping project costs down, leading to                consumers are already benefiting from low
  lower energy bills                                    energy prices.

• reducing risks of delayed investment and              If prices increase again and the project is
  associated price spikes                               making strong returns in the market, the
                                                        project repays consumers – a win-win scenario.

                                                                                  Large scale solar generation.

        NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   25

Delivering Renewable Energy Zones
Renewable Energy Zones are the modern-day                              The Government is prioritising the delivery of
equivalent of traditional power stations. They                         three Renewable Energy Zones, including a 3 GW
combine generation, transmission, storage and                          zone in the Central-West Orana region and an
system strength services to ensure a secure,                           8 GW zone in the New England region.
affordable and reliable energy system.

They will play a crucial role in delivering affordable
energy to help replace the State’s existing power
stations as they retire over the next 15 years.

What is a Renewable Energy Zone?

                            Wind                      Services                                Solar

      Other Dispatchables                                                                                Hydro


                                                                               New shared network
                                                                               Existing shared network

           Renewable Energy Zone Infrastructure

                                                  Transmission Line

26   NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
Coordinating generation                                      Our Renewable Energy
and transmission                                             Zone goals
infrastructure                                               The Renewable Energy Zones will unlock a
                                                             substantial pipeline of large-scale renewable
Investment in generation and transmission on
                                                             energy and storage projects and deliver lasting
this scale has not occurred in NSW for decades.
                                                             benefits for NSW, including:
Our regulatory and market frameworks are not
set up for the private sector to deliver the                 • more reliable energy from significant
electricity infrastructure we need in the time and             amounts of new energy supply
at the scale needed.                                         • energy bill savings from reduced wholesale
The transmission system is congested and its                   electricity costs
capacity to connect new generators is limited.               • emissions reduction from a cleaner
Transmission projects have long lead times and                 electricity sector
can take many years to develop. These projects               • community partnership from strategic
cannot currently be approved unless there is                   planning and best practice engagement
matching forecast generation. At the same time,                and benefit sharing.
generators will not commit to build unless the
transmission has been approved to be built. Even
with transmission, generators still need revenue
certainty. This creates a ‘chicken and egg’ problem
that is stifling investment in our energy sector.

If left to existing market signals, investment could
come too late to prevent price spikes and reliability
issues. It is also likely to occur ad-hoc, negatively
impacting local communities. Coordination will
ensure that investment is orderly, timely, optimised
and efficient. It also allows for careful and
deliberate consideration of community priorities
and concerns.

             NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   27
Pilot Central-West Orana Renewable                                                                                                                          Through a Registration of Interest process, the
                        Energy Zone                                                                                                                                                 NSW Government received 27 GW of generation
                                                                                                                                                                                    and storage proposals from investors looking to
                        Work is already underway on a pilot Renewable                                                                                                               build in the Renewable Energy Zone—more than
                        Energy Zone in the Central-West Orana region—                                                                                                               nine times the proposed capacity of 3 GW.
                        due to be shovel-ready by the end of 2022.

                                                                            3 GW                                                                                                                        Enough to
                                                                            new transmission                                                                                                            power around
                                                                            capacity.                                                                                                                   1.4 million homes.

                                                                              Around 3,900                                                                                                              Up to $5.2 billion
                                                                              expected      peak
                                                                                Ä Moorambilla
                                                                                ª                                                                                                                       private investment
       Girilambone                                                                Solar Farm                                                                                                                       Ä Gunnedah
       Solar Farm                                                             construction jobs.                                                                WARRUMBUNGLE                            expected into   the Central-
                                                                                                                                                                                                                     Solar Farm TAMWORTH
                                                                                                                                                                    LGA                                                                                                               !

 ª                                                                                                COONAMBLE
                                                                                                                                                                                                        West Orana region to 2030.
                                                                                                                                                                                                                                                            Solar Developments TAMWORTH

rren Hut                                                                                                                                                                                                                                       ªÄ In Planning
lar Farm
                                                                                      Ä Moorambilla
                                                                                      ª                            Ä Moorambilla
     Girilambone                                                                           Solar Farm                                                                                                                          Ä Gunnedah
                                                                                                                                                                                                                               ª   ªÄ Gunnedah ª
           Solar Farm
                                               Solar Farm
                                                                                                                        Solar Farm                               WARRUMBUNGLE
                                                                                                                                                                     LGA                WARRUMBUNGLE
                                                                                                                                                                                                                                 Solar Solar
                                                                                                                                                                                                                                                Ä Approved
                                                                                                                                                                                                                                       FarmFarm TAMWORTH
                                                                                                                                                                                            LGA                                                                                           !

   ª                                      Ä
                                          ª     WARREN
                                                                                                   COONAMBLE               COONAMBLE
                                                                                                                                                                                                                                               ªÄ Under Construction

                                                                                                                           Central-West Orana REZ
                                                 LGA                                                  LGA                     LGA                                                                                                     LIVERPOOL PLAINS

   Ä Bogan River
   !                                                                                                                                                                                                                          GUNNEDAHGUNNEDAH
                                                                                                                                                                                                                                 LGA                Legend
an     Solar Farm                                                                                                            Indicative Location                                                                                               ªÄLegend
                                                                                                                                                                                                                                                                      Solar Developments TAMWORTH REGIONAL
                                                                                                                                                                                                                                                             Solar Developments TAMWORTH
 Plant                               Nevertire
                                     Yarren Hut
                                                                                                                                                                                                                  Liverpool Range                           Wind Developments         LGA
                                                                                                                                                                                                                                                                ÄIn Planning
                                                                                                                                                                                                                                                                           In Planning
arren Hut                                                                                                                                                                                                         Wind Farm
                                            Farm                                                                                                                                                                                                             Ī In Planning

olar Farm                          Ä
                                   ª                                                                    Gilgandra                                                                                              Ä                                                Ä

                                   ª                                                                    Solar Farm
                                                                                                                                                                                                                                                             Ī ª Approved

                                                NYNGAN                            WARREN

                                                                                                                                           Dunedoo Orana REZ
                                                                                                                                        Central-West           Valley of                                                                       LIVERPOOL PLAINS Ä          Under Construction
            NYNGAN                 ª    ªÄ Bogan River
                                                                                       LGA            Ä
                                                                                                      ª                                                                                                                                              LGA

                                                                                                                                                                                                                                                              ĪUnder  Construction
                                                                                                                             Central-West Orana  Farm
                                                                                                                                                  REZ       Ä the Winds                                                                                         ÄUnder Construction

                                                                                                                                                                                                                                        LIVERPOOL PLAINS
                                                                                                                                           Indicative Location

    ªÄ Bogan River               Nyngan      Solar Farm                                                                                                                                                                                       LGA
                                                                                                                                                                                                                               UPPER HUNTER
                                                                                                                                     Indicative Location                                               Wind Farm                   LGA
                                                                                                                                                                                                                          Liverpool Range                    Ī
                                                                                                                                                                                                                                                              Ä Operational

                                 Solar Plant                               Nevertire                                                                                                                                                                              Operational
                                                                                                                                                                                                                                                                      Wind Developments
 gan     Solar Farm                                                                                          Dubbo                                                                                                        Wind Farm
                                                                           Solar Farm                                                                                                                              Liverpool                                          Ä
                                                                                                                                                                                                                                                            Operating System     Voltages (kV)
ar Plant                                                                                                                                                                                                                 Ä Range                                       In Planning

                                        Nevertire                               Wahroonga                    Solar Hub          Gilgandra North
                                                                                                                              Wellington                                                                                                                     Wind Developments

                                                                         ª                                                                                                              Stubbo                     Wind Farm
                                                                                                                                Solar Farm                                                                                                                       132kV Approved
                                        Solar Farm                              Solar Farm

                                                                                                                              Solar Farm                                                 Dunedoo
                                                                                                                                                                                        Solar Farm      Valley of                                                  In Planning

                                                      Narromine ªÄª                             Gilgandra                       Ä
                                                                                                                                ª                                                                                Ä
                                                                                                                                                                                                                 ¤ ¤

                                      ª                           Ä                                                                                                                       Solar Farm Ä the Winds                                                    Ä
                                                                                                                                                                                                                                                                 330kV Under Construction

                                                                                        DUBBO ! Solar Farm                                                  Ä
                                                                                                                                      Bodangora Dunedooª                                                                                                          ÄÄ

                                                      Solar Farm
                                                                                                                                                                                                                                         UPPER HUNTER
                                                                                                                                                                                            Ä Valley of Wind Farm
                                                                                                                                                                                            ª            LGA                                                     500kV Operational

                                                (Dubbo Solar Hub)                              Ä Maryvale
                                                                                               ª                                      Wind Farm Solarª
                                                                                                                                     Dubbo              Ä  Beryl
                                                                                                                                                         Farm         the Winds                                                                                   ÄUnder Construction

                                                                                                                                                                    Ä                                                                                            Operating  System Voltages (kV)
                                                                                                                                                                                                                                                                 Primary Road

                                                                                                    Solar Farm                       Ä
                                                                                                                                     Solar Hub Wellington  Solar
                                                                                                                                                          North  Farm
                                                                                                                                                                               Ä Wollar
                                                                                                                                                                                             UPPER HUNTER
                                                                                                                                                     ª                  Stubbo ª

                                                                                                                                                                      Wind  Farm                 LGA
                                                                                                                                                                                                                                                                  Ä Local

                                                                                                                Solar Farm                     Solar Farm                                                                                                                 Government
                                                                                                                                                                        Solar FarmSolar Farm
                                                                                 Narromine ªÄ
                                                                                               Ä DUBBO
                                                                                               ª         Ä
                                                                                                         ª                                                                          Ä
                                                                                                                                                                                    ª                                                                Operating
                                                                                                                                                                                                                                                                System     Voltages   (kV)
                                                                                      Farm Solar Hub ª     Ī
                                                                                                                                                                                                                                                         Indicative  Location   of Renewable
                                       NARROMINE                            Solar
                                                                       WahroongaSolarFarm                       Ä
                                                                                                                ª                 North Bodangora Stubbo                                                                                                      500kV
                                                                       (DubboFarmSolar Hub)                              Maryvale   Ä                                Burrundulla Beryl                                                                   Energy

                                                                       Solar                         Ä                                           Wind     Farm
                                                                        Suntop     Stage   2        Ä
                                                                                                    ªª        Solar Farm
                                                                                                                       Solar Farm      Uungula Ä                 ÄSolar
                                                                                                                                                                 ªSolar FarmÄFarm
                                                                                                                                                                            ª    Solar  Farm
                                                                                                                                                                                                                                                              Primary Road
                                                      Narromine ª ÄªÄ DUBBO                                                                                                                                Ä Wollar

                                                                                                                                                                                                                               MUSWELLBROOK                330kV
                                                     Solar Farm
                                                                               Solar Farm
                                                                                                        Suntop                       ÄWind Farm ª
                                                                                                                                     ª                          Ä                                              Solar Farm             LGA                     Local Government

                                                                                                      Solar FarmÄ Bodangora
                                                                                                                ª                      Ä
                                                                                                                                       ª Ä
                                                                                                                                         ª                   Beryl
                                                                                                                                                                                            MID-WESTERN REGIONAL
                                                                                                                                                                                                                                                              Indicative Location of Renewable
                                          (Dubbo Solar Hub)                                         Maryvale Mumbil    Wind Farm                        ÄÄ
                                                                                                                                                        ª                               Burrundulla
                                                                                                                                                                                                                                                              Energy   Zone

                                                                                                  Solar Farm
                                                                                                    Suntop        2Ä ª
                                                                                                           Stage Solar       ªÄ
                                                                                                                            ÄFarm                            Solar
                                                                                                                                                              Uungula  Farm ª         Ä            Wollar
                                                                                                                                                                                                                                                           Primary Road

                                                                                       Wellington                                                                                              Farm
                                                                                                                                                                       Farm Ridge
                                                                                                        Solar Farm                                                                                 SolarMID-WESTERN
                                                                                                                                                                                                             Farm REGIONAL                      LGA        Local  Government
                                               PARKES                            SuntopSolar Farm          Ä DUBBO
                                                                                                           ª                                Ä
                                                                                                                                            ª                       Wind Farm                                      LGA
                                                                              Solar Farm                    Ī
                                                                                                            ª Ä REGIONAL                      Mumbil
                                                                                                                                                                                                                                                           Indicative Location of Renewable
                                                                                                                                       Ä Solar Farm Burrundulla                                                                                            Energy Zone


                                        Parkes                           Suntop      Stage 2         ªÄMolong
                                                                                                     Ī       Wellington
                                                                                                                                         Uungula                   Ä
                                                                                                                                                                   ª                    Crudine Ridge

                                   Solar Farm
                                                           Quorn Park LGASolar Farm                   Solar Farm
                                                                                                              Solar Farm                         DUBBO                   Solar Farm     Wind Farm                                MUSWELLBROOK                                                                     LAKE MACQUARIE
 CHLAN                                                                                                                                                                                                                                       SINGLETON
                                                                                                                                                                                                                                        LGA                                                                              LGA
                                                   Ä ª  Ä Solar FarmParkes                               Ä ª
                                                                                                         ª       ÄOrangeMolong                                                         Ä MID-WESTERN                                             LGA

                                                  ª                                                                                                LGA
                                   Goonumbla                      Solar Farm           Quorn   Park                Mumbil       Solar Farm                                                                                                                                                                     LAKE MACQUARIE

                                                                                   Ä Solar                         Solar
                                                                                                                   Solar Farm   Farm

                                    Solar Farm                                 Ä ª
                                                                               ª               Farm Ä
                                                                                              Farm ª
                                                                                                                                     ª                                 Crudine Ridge
                   Jemalong                      PARKES           Goonumbla             Solar Farm ORANGE
                                                                                                                 ª                              Orange  BATHURST REGIONAL
                                                                                                                                                                                                         LITHGOW  CITY
                                                                   Solar Farm
                                                                                                                                                Solar Farm      LGA
                                                                                                                                                                       Wind Farm                              LGA                    SINGLETON                                                 CENTRAL COAST
                  Solar Farm
                                                         Ä Daroobalgie
                                                                                                                      Farm       Ä            ÄEglinton ª
                                                                                                                                              ª                 Ä Ä BATHURSTLGAREGIONAL
                                                        ª                                                                                                                                                                                LGA                      HAWKESBURY                         LGA

                                                     Jemalong                            CABONNE
                                                                                                                                                                                                                      LITHGOW CITY                                    LGA
                            ª            Parkes
                           Ä Solar FarmSolar FarmSolar

                                                                                                                                           Solar       Farm

                                                                                                                                                                       Eglinton      Ä
                                                                                                                                                                                                                           LGA                                                             CESSNOCK
                                                                                                                                                                                                                                                                                               CENTRAL COAST

                                                            Quorn   Park             Ä Daroobalgie Solar Farm
                                                                                     ª                          CABONNE
                                                                                                                                                                                                                                                                                                                    LAKE MACQUARIE
                           Jemalong                         Ä FORBES
                                                                                              !                   LGA
                                                                                                                        Flyers Creek                               Solar
                                                                                                                                                                       ªÄFarm                                                                                                                                              LGA

                           Solar Thermal LGAª
                                                     Ä ª Ä Jemalong
                                                            Solar Farm                  Solar Farm         Ä
                                                                                                           ª            Wind Farm                                              Solar   Farm  Brewongle
                                                                                                                  Ä   Orange                         Flyers Creek                        Ä


                           Pilot Plant                     Solar Thermal LGA                                                                                                                 Solar Farm
                                      Solar Farm
                                                                                          Manildra                    Solar Farm
                                                                                                                                Ä Blayney      Ä Wind Farm                                                                                                             NEW

                                                           Pilot Plant
                                                                                        Solar Farm ª   Ä                                                                                                                                                             SOUTH

                                                                                                                                                                                                                             BLUE MOUNTAINS

                    Jemalong                                                                                       Ä
                                                                                                                                     Wind BLAYNEY
                                                                                                                                              Farm Ä         Blayney
                                                                                                                                                          BATHURST  REGIONAL                                                        LGA BLUE MOUNTAINS        HAWKESBURY

                                                                                                                                                        2 Wind Farm                                                                                                                                                                  D

                                                                                                                                                                                                           LITHGOW CITY
                                                                                                         ORANGE    LGA                                            LGA                                                                                              LGA
                                                                                                                                             !                                                                                                LGA                         WALES
                                                                                                                                                                                                                LGA                                                                              CENTRAL COAST
                   Solar Farm

                                                          Ä Daroobalgie
                                                          ª                                CABONNE
                                                                                                                                                    Eglinton      Ä
                                                                                                                                                                  ª                                                                                                                                    LGA

                            ª Ä
                              ª        FORBES                  !

                                                             Solar Farm
                                                                                              COWRA                  COWRA
                                                                                                                                             Solar     [Farm
                                                                                                                                                                      Kilometres Brewongle
                            Jemalong WEDDIN   LGAFORBES
                                                                           LGA                                        0 5Flyers
                                                                                                                              10       20Creek
                                                                                                                                             30 0 5 10        20    30    ªÄ Solar
                                                                                                                                                                                 OBERON        OBERON
                                                                                                                                                                                                                                                                                  SYDNEY                 !

                                                                                                                                                                                   LGA           LGA
                            Solar Thermal LGA                                                                              Wind Farm Scale: 1:1,250,000 @ A3
                                                                                                                        Scale: 1:1,250,000 @ A3

                            Pilot Plant
                                                                                                                                  Ä Blayney

                                                                                                                                                                                                                               BLUE MOUNTAINS
                                                                                                                                        Wind Farm                                                                                     LGA                               WALES

                                                                                                                      [ Industry and Environment
                                                                                                   Department of Planning,
                                                                                                                                                                                                                                                                                                  SYDNEY !
                                                       WEDDIN                                                                                                          Kilometres

                                     NSW Department of Planning, Industry and Environment | 2NSW Electricity Infrastructure Roadmap Overview                                                                                                                                                                                         D
                                                        LGA                                                                                  0     5   10       20    30

                        28                                                                                                                       Scale: 1:1,250,000 @ A3
The Roadmap builds on                                       The NSW Government is also establishing a
                                                            special access rights regime for generators and
our existing work                                           storage providers to connect to the Renewable
                                                            Energy Zones. Dedicated rights can de-risk new
In June 2020, the NSW Government announced
                                                            projects, enabling them to better forecast energy
that it would set up the Energy Corporation
                                                            exports and revenue streams and lower their costs
of NSW to work closely with communities and
                                                            of finance. This also ensures strategic and optimal
industry stakeholders, coordinating generation
                                                            use of new transmission infrastructure, maximising
and transmission at every level. The NSW
                                                            the benefits of these investments to consumers.
Government also committed $120 million to get
the State’s first two Renewable Energy Zones up             This Roadmap introduces new elements to
and running, and the Commonwealth Government                remove more barriers to investment and maximise
committed to financially support the transmission           Renewable Energy Zone benefits for communities.
for the Central–West Orana pilot Renewable
Energy Zone.

                                                                                     Solar farm at Moree, NSW.

            NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   29
1                                                              2

Renewable Energy Zone –                                        Electricity Infrastructure
Transmission Development Scheme                                Investment Safeguard – Renewable
The Government will establish the Transmission
                                                               Energy Zone generation
Development Scheme to de-risk Renewable                        The Electricity Infrastructure Investment
Energy Zone grid investment.                                   Safeguard will unlock new generation in
                                                               Renewable Energy Zones and increase
The Scheme will bridge the gap between when
                                                               competition in the energy market to drive down
the grid is built and when generators connect,
                                                               energy prices. It will give Renewable Energy Zone
solving the ‘chicken and egg’ problem that
                                                               investors the long-term revenue certainty they
currently prevents large-scale grid expansion.
                                                               need to secure lower cost project finance and
The Scheme will be supported by a regulated                    build new infrastructure in NSW.
cost recovery process that will facilitate low cost
                                                               Long Term Energy Services Agreements will
financing for new transmission development.
                                                               be awarded through a competitive process to
The Scheme is designed to minimise costs to                    Renewable Energy Zone generation projects.
consumers. It will involve a rigorous, independent             Projects will be assessed against a range of
assessment to determine the reasonable and                     eligibility and merit criteria to ensure they meet
prudent costs of building the Renewable Energy                 the NSW Government’s objectives of delivering
Zone transmission. This will protect consumers                 low cost electricity and strong
from cost overruns.                                            community outcomes.

This builds on the financial support committed                 Awarding of Agreements will encourage
by the Commonwealth Government for the pilot                   generators to support local jobs and the local
Central-West Orana Renewable Energy Zone, and                  economy, engage with local communities and
will enable additional zones to be built.                      proceed in locations and ways that
                                                               support agriculture.
The Renewable Energy Zones will also support
improvements to the distribution network,                      The Consumer Trustee will follow an investment
benefiting local communities.                                  objective for Renewable Energy Zones. This will
                                                               see generation equivalent to the size of the 3 GW
Overall, the Scheme will allow Renewable Energy
                                                               Central-West Orana Renewable Energy Zone,
Zones to be planned in a way that meets the long-
                                                               8 GW New England Renewable Energy Zone built
term energy needs of NSW.
                                                               and a 1 GW allowance for outstanding projects
                                                               by 2030 and otherwise to maintain reliability and
                                                               minimise consumer prices.

30    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview

                                                                 The NSW Government will support
The NSW Government will establish a Renewable
                                                                 planning processes to reduce assessment
Energy Zone planning framework to streamline
                                                                 timeframes and planning fees for
assessments, attract investment, optimise
                                                                 Renewable Energy Zone projects, saving
complementary land uses and deliver enduring
                                                                 investors time and money.
benefits for regional communities.

For communities, it will provide an opportunity
to engage with Renewable Energy Zone delivery
as a whole, rather than in a piecemeal, project-
by-project way. It will also seek opportunities for
broader scale community benefit sharing and
better environmental outcomes.

                                                                                   Worker inspecting solar panels.

             NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview   31

Dispatchable electricity infrastructure is critical
Firming refers to generation that can deliver electricity to the market on demand.

     Firming can be provided by a range of                                                       South Australian ‘Emu’ Curve
     technologies, including batteries, gas                                                      forecasting a steeper evening ramp
     generators and demand response. In the                                                      over time11
     future, fast firming may also be able to
     be provided by hydrogen generators.

                                                                            SA Operational Demand Forecast (MW)


As the electricity market moves towards more                                                                      1000

generation that relies on variable conditions, like                                                               800
weather, firming is increasingly valuable to ensure
we can quickly stabilise the electricity system and
meet peak demand.                                                                                                 400

The Electricity Infrastructure Investment
Safeguard will ensure enough firming capacity
is in the market to back up renewables and keep                                                                      12 AM          6 AM          12 PM     6 PM          12 AM

the system stable.                                                                                                           2019          2020    2021   2022     2023

For example, gas peaking plants can help provide
                                                                                                 As renewable generation, particularly
stability because they can sit at a low-level or even
                                                                                                 rooftop solar, enters the system, the
be offline during low-demand periods, and rapidly
                                                                                                 ramp up in evening electricity demand
ramp-up to meet evening demand. Big batteries
                                                                                                 on the grid is predicted to become
can also store and dispatch energy when needed.
                                                                                                 steeper without action, as shown here
Bioenergy can also provide on-demand energy,
                                                                                                 in South Australia’s ‘emu curve’. Firming
complementing other firm technologies.
                                                                                                 technologies can rapidly increase their
Where a breach of the State’s Energy Security                                                    output to meet this demand trend.
Target is identified, these projects will be eligible
to compete for Long Term Energy Service
Agreements. The firming pillar is technology
neutral, with technologies eligible if they meet the
technical requirements.

11. Australian Energy Market Operator, Minimum operational demand thresholds in South Australia, May 2020.

32    NSW Department of Planning, Industry and Environment | NSW Electricity Infrastructure Roadmap Overview
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