STATE OF THE RENEWABLE ENERGY INDUSTRY IN NSW

May 2014

NSW Government position on renewable energy

  • Increasing renewable energy generation is a critical part of the state’s energy solution.The Government’s vision is for a secure, reliable, affordable and clean energy future for the state. We are working towards an energy system that is less polluting and attracts new jobs and investment to NSW at the lowest possible cost.
  • Goal 22 of the NSW 2021 Plan states that the Government “will contribute to the national renewable energy target by promoting energy security through a more diverse energy mix, reducing coal dependence, increasing energy efficiency and moving to lower emission energy sources”. Specific initiatives under the Goal include developing “a Renewable Energy Action Plan for NSW to identify opportunities for investment in renewable energy sources.”
  • In keeping with this Goal, the Government released the Renewable Energy Action Plan (the Plan) in September 2013 to guide NSW’s renewable energy development to support the national target of 20 percent renewable energy by 2020.

Status of renewable energy in the electricity mix in NSW

Summary of installed capacity and generation by fuel type in NSW

Table 1: Summary of installed capacity – 2013

Fuel Type / MW / %
Non-Renewable
Coal / 11,351 / 58.2
Gas (including waste gas and CSM) / 2,238 / 11.5
Oil / 180 / 0.9
Total Non-Renewable / 13,769 / 70.7
Renewable
Bagasse / 76 / 0.4
Landfill Gas / 62 / 0.3
Other biomass / 46 / 0.2
Small hydro / 444 / 2.3
Snowy / 4,143 / 21.3
Solar / 667 / 3.4
Wind / 282 / 1.4
Total Renewable / 5,720 / 29.3
Total Renewable and Non-Renewable / 19,489 / 100

Figure 1:Installed capacity by fuel type in NSW in 2013

Generation by fuel type – 2013

Table 2: Summary of generation by fuel type installed capacity – 2013

Fuel Type / GWh / %
Non-Renewable
Coal / 57,516 / 79.5
Gas (including waste gas and CSM) / 5,457 / 7.5
Total Non-Renewable / 62,973 / 87.1
Renewable
Bagasse / 184 / 0.3
Landfill Gas / 349 / 0.5
Other biomass / 250 / 0.3
Small hydro / 627 / 0.9
Snowy / 5,038 / 7.0
Solar / 1,169 / 1.6
Wind / 838 / 1.2
Heat pump / 36 / 0.0
Solar water heater / 844 / 1.2
Wood waste co-firing / 1 / 0.0
Total Renewable / 9,335 / 12.9
Renewable share excluding Snowy / 4,297 / 5.9
Total Renewable and Non-Renewable / 72,308 / 100.0

Figure 2: Generation by fuel type in NSW in 2013

Growth in renewable energy generation

Renewable energy generation has increased 4.5 percentage points between 2001 and 2014. Over this time there has been approximately $8 billion worth of investment in renewable electricity generation in NSW.[1] The non-Snowy share of the renewable generation in NSW has also quadrupled in the past five years, while the generation from wind has gone up 20 times and from solar PV by 40 times in the same period.

Figure 3: Growth in renewable generation since 2001

Figure 4:Difference in total fuel supply in NSW between 2001 and 2013[2]

Future renewable energy opportunities

There is currently a total of 8,396 MW of renewable energy projects worth an estimated $13 billion; progressing through the NSW planning system as shown in the following graphs (see Appendix for detailed breakdown of projects).

Figure 5: Investment valueof Critical or State Significant Development energy generation projects in the NSW planning system[3]

Figure 6: Generation capacity of Critical or State Significant Development energy generation projects in the NSW planning system[4]

Figure 7: Employment opportunities of Critical or State Significant Development energy generation projects in the NSW planning system[5]

NSW Renewable Energy Action Plan

The Plan positions NSW to increase energy from renewable sources at least cost to the energy customer and with maximum benefits to NSW.

The strategy is to work closely with NSW communities and the renewable energy industry to increase renewable energy generation in NSW.

The Plan details three goals and 24 actions to most efficiently grow renewable energy generation in NSW.

Goal 1: Attract renewable energy investment
  1. Improve the process of network connections
  2. Consider a more strategic and integrated approach to assessment of renewable energy projects
  3. Remove technology specific barriers to investment
  4. Create an online information portal that provides information to investors
  5. Promote and facilitate investment opportunities with the appointment of a renewable energy advocate
  6. Request IPART to estimate a benchmark range for a fair price for small-scale generated solar energy
  7. Develop an information package for small-scale solar PV, solar hto water and wind generation
  8. Support mid-scale solar PV to enable uptake of solar technologies where they are most cost effective
  9. Engage with the Commonwealth Government to facilitate construction of the Solar Flagships Project

Goal 2: Build community support
  1. Implement NSW wind energy planning guidelines
  2. Engage communities early and effectively in renewable energy projects
  3. Facilitate community ownership of five renewable energy projects
  4. Promote the benefits to consumers of switching to Green Power accredited renewable energy
  5. Develop a draft NSW Smart Meter Policy

Goal 3: Attract and grow renewable energy expertise
  1. Investigate opportunities to support renewable energy experience centres/demonstration projects
  2. Conduct renewable energy research roundtables
  3. Promote NSW as a leader of research and innovation in renewable energy
  4. Continue the recently created NSW Renewable Energy Innovation Prize
  5. Establish a working group to develop an advanced bioenergy initiative
  6. Support research & development in advanced bioenergy applications at the University of New England
  7. Support research into applications of geothermal assisted power generation
  8. Identify opportunities to support the integration of geothermal projects and coal-fired power stations
  9. Support research & development in wave and tidal technologies
  10. Continue to support research and deployment of smart grid technologies

A new position of NSW Renewable Energy Advocate was created to oversee the delivery of the Plan.Key roles of the Advocate are to drive investment by supporting projects and overcoming their barriers such as network connections, work across government to facilitate industry development, reduce complex barriers and facilitate Federal Government funding.

Renewable energy at least cost

The Government will focus on the bestvalue-for-money solutions to deliver our renewableenergy commitments and support achievement of thenational target. The cost of renewable energy variesconsiderably among technologies and over time.

NSW is open for business in renewable energy

NSW has excellent renewable energy resources andthe Government is working to attract renewableenergy investment and jobs to the state.

Over 45 percent of Australia’s renewable energy companies are already based in NSW. This represents the largest share of installed renewable energy capacity in Australia.

There will be significant investment in renewable energy in the decade to 2020 – estimated by Bloomberg at$36 billion across Australia. Bloomberg’s model shows thatby 2018, solar technologies will begin to gain market sharefrom wind energy as the cost of solar systems is greatlyreduced. The forecast result is $18 billion invested inwind energy projects, $16 billion in both large andsmall-scale solar PV and $400 million in solar thermaltechnologies across Australia.[6]

Individual private sector investors will base theirlocational decisions not only on the energy resource andgrid connection fundamentals in each state, but also onhow open each jurisdiction is for business. The Government is seeking to attract a large proportion of thisinvestment in renewable energy to NSW.

Broad deployment of renewable energy technologies

Solar

NSW has a range of competitive advantages as a location for solar power investment, including excellent solar resources and world-class solar research institutions.

In 2012, NSW generated 922 GWh of solar energy from 519 MW of installed capacity. The Australian Energy Market Operator has forecast that within NSW and the ACT 2,260 GWh of solar energy will be generated from 1.87 GW installed rooftop PV capacity in 2020 and 5,560 GWh from 4.45 GW installed capacity in 2031.[7]

As of February 2014, NSW has 472 MW of new solar generation proposals with development consent and an additional 20 MW under assessment through the planning system.

To support large-scale solar in NSW, the Government will contribute $64.9 million in funding for the development of the solar PV project built in Broken Hill and Nyngan, set to be the largest solar power station in the Southern Hemisphere once completed.

The $450 million 155 MW project, built under the Commonwealth Solar Flagships Program and with funding from the Australian Renewable Energy Agency (ARENA), is being developed by AGL and First Solar.

The project will produce enough electricity to power around 50,000 homes and deliver up to 150 jobs in Broken Hill and up to 300 jobs in Nyngan, along with other associated regional benefits.

Work has now begun on the construction of the Nyngan Solar Power Plant. It is expected both plants will be fully operational by the end of 2015.

Under the Education Investment Fund component of the Solar Flagships project, the University of New South Wales has been granted $19 million to conduct related research.

NSW is at the forefront of solar research and development (R&D). The CSIROSolarTower in Newcastle is the largest solar thermal research facility in Australia with a capacity of 200 kilowatts.

In addition, the Government has invested in pioneering Australia’s first solar thermal cooling technology in a high-demand retail environment. Led by GPT Group and supported by CSIRO, Bovis Lend Lease and New Energy Partners designed and installed a solar thermal cooling plant to air-condition the Charleston Square shopping centre near Newcastle.

We also have global R&D leaders working in NSW, such as Professor Martin Green at The University of New South Wales, who has led the development of solar photovoltaic technology for 30 years.

We will continue to encourage excellent R&D, making the State an attractive place to invest, and putting NSW on the renewable energy world map. This will place NSW in a strong position to build high-quality renewable energy installations.

Mid-scale solar PV will become increasingly attractive as prices for installation on rural allotments, large industrial, commercial, government or community rooftops become comparable with the delivered cost of peak power.For example, Infigen Energy has begun construction of the Capital East Solar Farm, a 1 MW solar PV facility near Bungendore.

The levelised cost of solar PV becomes lower than non-renewables from mid 2030s onwards. PV is due to reach the bottom of the cost curve by 2040, with the most significant cost reductions between 2012 and 2020.[8]

Wind

Current forecasts show wind energy will deliver the bulk of new renewable generation up to 2020.

There is strong interest in the development of wind energy projects in NSW, with wind energy projected to remain the most economical form of large-scale renewable energy over the next decade.

Large areas within NSW have excellent wind resources by international standards and many of the best sites are located near existing electricity grid infrastructure.

The development of wind farms in regional parts of NSW has the potential to provide traditional farming communities with alternative income streams that are not rainfall-dependent.

Wind farms have even been referred to as ‘drought-proofing’ by farmers who host turbines on their properties. A 50 megawatt wind farm, for example, can provide up to $250,000 in payments to farmers and an ongoing community contribution up to $80,000 per annum for the life of the project.

As of February 2014, NSW has more than 2 GW of new wind generation proposals with development consent and an additional 5.6 GW under assessment through the planning system.

Based on wind projects with development consent or in the planning assessment phase there is the potential to add up to 8.2 GW of additional wind capacity, generating up to $21 billion in capital investment with associated employment and regional development benefits.

Wind farms and human health

The Australian Government’s National Health and Medical Research Council (NHMRC) is Australia’s peak body for health and medical research.

NHMRC researchers reviewed nearly 3,000 published references and around 500 public submissions addressing noise, shadow flicker and electromagnetic radiation produced by wind farms and found that no reliable evidence exists that wind farms cause health problems.

Waste to Energy / Bioenergy

NSW is well placed to lead the development and supply ofsustainable biomass for electricity and transport. TheGovernment will continue to support innovativeR&D of the bioenergy industry, including off-gridgeneration opportunities.

NSW Energy from Waste Policy Statement

The NSW Environment Protection Authority (EPA) released in March 2014 the NSW Energy from Waste Policy Statement. The Statement outlines a new policy that will increase investment in energy from waste infrastructure and deliver regulatory certainty to industry and confidence to the wider community.

The Policy Statement:

  • Sets a framework for the operation of purpose-built facilities to recover energy from residual wastes that are not able to be recycled and would otherwise be disposed of to landfill
  • Facilitates the use of certain low-risk wastes as fuels which, due to their origin, low levels of contaminants, homogeneity and consistency over time, are considered by the EPA to pose a minimal risk of harm to human health and the environment
  • Will encourage the recovery of the embodied energy from waste while offsetting the use of non-renewable energy sources and avoiding methane emissions from landfill, with minimal risk of harm to human health and the environment and without undermining higher order waste management options, such as avoidance, reuse or recycling.

The Government is working to introduce a more flexible regulatory scheme that helps strike the right balance between a sustainable timber industry and the environment.

The Protection of the Environment Operations (General) Amendment (Native Forest Bio-material) Regulation 2013 has been introduced to enable the use of invasive native species (the tree heads and off cuts of trees cut for sawlogs and trees that might otherwise be made into pulp for paper production) to be used for electricity generation.

The supply of energy from this source will contribute to an increasingly diverse generation base, and therefore improved energy security.The EPA will carefully manage these changes to avoid unintended consequences.

Hydro

Constructing the iconic Snowy Mountains Hydroelectric Scheme made NSW a world leader in water-generated power.

While the technology is mature, there are futureopportunities to install small-scale facilities on dams,weirs, water and sewage treatment plants, flow controlstructures and water supply pipelines, and to augmentexisting hydro plants. There is an estimated total of morethan 1,000 MW in potential generation atseveral dozen sites in NSW.

A recent example is the new3.7 MW hydroelectricity plant at Prospect Reservoir inWestern Sydney. The Government is researchingimprovements so future small hydropower projects ondams and weirs are fish-friendly and support the needsof local and downstream water users.

NSW has excellent hydropower R&D capacity at facilitiessuch as the University of NSW’s Water ResearchLaboratory. There is strong potential to export ourknowledge to assist the development of very largehydropower resources in nearby nations in SoutheastAsia and Australasia.

Wave and tidal

NSW has superior wave and ocean resources with along coastline exposed to good ocean swells. The NSWcoast also possesses a range of tidal energy resourcesat ocean, lagoon and river mouths.

These technologies are highly developmental, both inAustralia and internationally.

The Government has committed to encourage further R&D inwave and tidal technologies in NSW under the Plan.

Geothermal

NSW has potential for enhanced geothermal systemsresources (‘hot dry rocks’) close to customers, generatorsand networks, with an estimated 55 GWof potential electricity generation if 20 percent of the totalestimated heat energy is extracted.

According to industryresearch, NSW may have the potential to generate up to46 times more energy from geothermal resources thancurrently generated using fossil fuels.

NSW is supporting resource mapping of geothermalenergy potential, and has funded research into rockthermal properties to map the geothermal landscape in the

SydneyBasin. It has also commissioned a scoping study to identify a resource base, possible markets and currentimpediments to local small-scale geothermal powergeneration projects.

A collaborative research project bythe University of Newcastle, Xstrata and NSW Trade &Investment is also examining the potential for geothermalenergy to reduce emissions from coal-fired power stations.

The Government is also facilitating resourcediscovery by extending the mineral exploration licensingregime to include geothermal resources. Licences havebeen granted to explore for geothermal energy in theSydney and GunnedahBasins.

The Government’s Darling Basin Drilling Program is exploring sites in NSW, assessing their geothermal potential and suitability for storing carbon dioxide. Two Exploration Licences have been granted that will allow NSW Resources Energy (a division of NSW Trade Investment) to conduct the drilling program.

Key renewable energy companies currently operating in NSW

Australia

  • AGL
  • Infigen Energy
  • GE Australia
  • Epuron
  • Wind Prospect Group

Spain

  • Fotowatio Renewable Ventures
  • Acciona - owned by Acciona SA, a Spanish-based company
  • Union Fenosa

China

  • Yingli Solar
  • Suntech

USA

  • First Solar
  • Advanced Energy

Europe

  • Continental Wind Partners

Thailand

  • Ratch Australia

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Appendix
Key renewable energy projects in NSW

Renewable energy projects in the NSW Planning system/ with Planning approval

Energy project / Location (LGA) / Owner / Technology / Approved capacity (MW) / Jobs created (FTE) / Jobs - construction / Jobs - operational / Estimated cost of project ($AUD millions)

Projects that are currently being assessed by Planning (are yet to receive Planning approval)

Bango Wind Farm / YassValley, Boorowa and Upper Lachlan Shire / Wind Prospect CWP / Wind / 340 / 132 / 120 / 12 / 700
Biala Wind Farm / Upper Lachlan Shire / Newtricity / Wind / 160 / n/a / n/a / n/a / 200
Crookwell 3 / Upper Lachlan Shire / Crookwell Development Pty Ltd / Wind / 116 / 46 / 40 / 6 / 102
Crudine Ridge Wind Farm / Bathurst / Crudine Ridge Wind Farm Pty Ltd / Wind / 374 / 90 / 75 / 15 / 300
Eastern Creek Energy from Waste Facility / Blacktown City Council / Next Generation / Bioenergy / 140 / 345 / 300 / 45 / 500
Jupiter Wind Farm / Goulburn-Mulwaree and Palerang / EPYC / Wind / 350 / 216 / 200 / 16 / 400
LiverpoolRange Wind Farm / Warrumbungle, Upper Hunter, Liverpool Plains & Mid Western Regional / Epuron / Wind / 1815 / 220 / 200 / 20 / 1700
Paling Yards Wind Farm / Oberon / Union Fenosa Wind Australia / Wind / 178 / 76 / 65 / 11 / 275
Rugby Wind Farm / Boorowa / Repower Australia / Wind / 290 / 170 / 150 / 20 / 390
RyePark Wind Farm / Boorowa, Yass, Upper Lachlan / Epuron / Wind / 374 / 87 / 80 / 7 / 300
Uungula Wind Farm / Wellington, Mid-Western Regional / Uungala Wind Farm Pty Ltd / Wind / 623 / 290 / 250 / 40 / 1,300
West Narrabri Electricity Generating Facility / Narrabri Shire Council / Power Partners Generation Pty Ltd / Biogas / 55 / n/a / n/a / n/a / 58
Woolbrook Wind Farm / Tamworth Regional Council, Walcha Council / Newtricity / Wind / 80 / 1,705 / 1,107 / 598 / 101
Yass / Harden Shire, YassValley Shire / Epuron / Wind / 502 / 110 / 100 / 10 / 850
Totals (projects that are yet to receive approval from NSW Planning) / 5,396 / 3,487 / 2,687 / 800 / 7,176

Planning Approved Projects