Energy Spectrum Australia

Energy Spectrum Australia | Issue 6

Welcome to the sixth edition of Energy Spectrum Australia.

The below extract has been taken from our sixth edition, and if you have enjoyed reading this article and want to read more about the latest developments in the Australian energy market, please contact Ben Cerini, b.cerini@cornwall-insight.com.au for more information.

NSW releases its 10 year plan to reach net zero by 2050

New South Wales (NSW) published Net Zero Plan Stage 1: 2020–2030 on 14 March, which has assessed ways in which to deliver a 35% emissions reduction by 2030. The Plan encompasses four key elements: opportunities arising from global climate change action; progress in reducing emissions and future projections; the NSW government’s net zero priorities and its approach to keeping track of progress.

The plan will be financially supported by a Memorandum of Understanding on Energy and Emissions Reduction Policy between the Commonwealth and NSW governments
(Bilateral), previously announced in January. Both governments will invest up to $2bn over 10 years to lower emissions and explore existing and developing technologies to reach its climate targets. NSW is also expected to attract over $11.6bn of investment over the next decade.

The plan details four priority areas: to drive uptake of proven emissions reduction technologies; to empower consumers and businesses; invest in the next wave of emissions reduction and to ensure the NSW government leads by example. The NSW government has confirmed plans to launch a $450mn Emissions Intensity Reduction Programme which will enable businesses to transition to low emissions alternatives. The programme will also be joined by a $450mn commitment to NSW from the Climate Solutions Fund.

Through the Bilateral, the governments will also fast-track the delivery of NSW’s first Renewable Energy Zone. The three Zones in the Central-West, New England and South-west will play critical roles in delivering further renewable power into the grid and could drive up to $23bn of private sector investment, the plan states.

To transform the transport sector and accelerate the electric vehicle (EV) market, the plan has clarified the NSW government’s aims to expand its existing Electric and Hybrid Vehicle Plan and to develop an EV Infrastructure and Model Availability Programme to fast-track EV growth. The programmes will also look to tackle the lack of fast charging infrastructure and the limited range of affordable EV models which are presently creating significant barriers to EV adoption.

The NSW government will launch a Hydrogen Programme and will now set a target of up to 10% hydrogen in the gas network by 2030 to improve energy reliability across the gas network and provide increased security of supply.

The plan also highlights NSW government’s aims to more than double its existing solar target from 55,000 to 126,000MW hours by 2024; purchase electricity from low emissions sources of generation; increase existing targets for electric or hybrid passenger vehicles to 30% by 2023, with at least 10% to be fully electric; replace Sydney’s bus fleet with electric buses and to roll out a new fleet of hybrid diesel-electric passenger trains from 2023.

The NSW Net Zero Plan Stage 1: 2020–2030 is an ambitious but commendable strategy by the NSW government to achieve its first stage in its goals to reach net zero emissions by 2050. However, achieving this plan in its current form is not an easy ask. Coal currently delivers between 71 – 89% of electricity needs for customers in NSW.

Whilst the development of the three Renewable Energy Zones (REZs) outlined in the report support the replacement of these aging coal plants, there will be significant work required on augmenting the transmission network to make the most of these clean energy resources. It is left to be seen if NSW will take a similar route as Victoria by bypassing the national electricity rules and processes in its bid to achieve this plan as regulatory bottlenecks can notably delay network upgrades. This issue takes further significance when the plan for hydrogen is considered as this will require even more renewable projects to achieve its full benefits and overcome the energy loss associated with this technology.

Depending on the factors such as charging times, future energy mix, as well as role of new storage in the state, a rapid uptake of EV can add to evening peak demand (especially if people are charging after work when the sun has set). The plan is certainly a welcome one, how it evolves through execution is one to watch…