NSW to fast-track 750MW of renewables

AEMO Services has selected another five energy projects to fast track as part of the state’s Electricity Infrastructure Roadmap incentive scheme, which are set to deliver 750MW of renewable generation and 534MW (4,192MWh) of long-duration storage. 

The successful bidders include one solar project, one wind project, two lithium-ion battery energy storage system projects, and one advanced-compressed air energy storage system.

AEMO Services Executive General Manager, Paul Verschuer, said that the results of the latest tender round out a significant year for AEMO Services and the NSW Electricity Infrastructure Roadmap tender program.

“AEMO Services has delivered three highly successful tenders throughout 2023, helping to bring-forward more than $8.5 billion private sector investment in New South Wales’s future energy system,” Mr Verschuer said.

“Participation in our tenders demonstrates the market value and fit of our innovative financial contract, which offers projects exposure to market upside and reduces risk and cost to consumers compared to traditional schemes.

“AEMO Services will continue to deliver biannual tenders for at least the next decade, incentivising private capital for new infrastructure investment by 2030 to meet the state’s minimum targets of 12GW of renewable energy and 2GW of long-duration storage over that timeframe.”

Mr Verschuer also said that the state tender program was driving confidence in the New South Wales energy transition with both investors and consumers.

“We provide those projects with the flexible financial security they need to accelerate their completion.

“From the strength of the response to the first year of our tender process, it’s clear that the insurance provided by the LTESA contract is working to address a key market risk that might otherwise delay or discourage investors from participating in the transition.” 

Mr Verschuer said that a range of innovative technologies and considered community initiatives had been proposed in this tender round, including community benefit programs, creation of local workforce programs, support for local supply chains, and opportunities for First Nations people.

“Some proponents also bid to reduce the incentives in their contract to reflect their specific needs, which reduces the final cost and risk to electricity consumers and validates the competitive mechanism we’ve put in place. 

“Financial bids in the tender were very competitive and were substantially below the estimated levelized cost of energy. Some bidders also cut options from the contract or have the LTESA in place for only a part of the project, reducing the size of the subsidy they could receive and providing better value for New South Wales consumers.” 

Mr Verschuer said that whilst AEMO Services were pleased with participation levels in the first year of tenders, the state would need to continue development at or near record levels to remain on track to meet minimum investment objectives.

“We are looking forward to building on the momentum of this year, and we encourage prospective tender bidders to contact us to learn more about the immense investment opportunity the New South Wales energy transition presents.”