NSW government renewable energy projects delayed and more expensive

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The NSW government’s renewable energy projects are expected to be delayed, while some cost more than originally anticipated, according to new modelling.

NSW Energy Minister Penny Sharpe will on Thursday unveil a new plan – called the Network Infrastructure Strategy – which sets out the energy transition plans from coal-fired power to renewable energy.

New data from the NSW government shows delays and increased costs to many renewable energy zones.Credit: Janie Barrett.

Many of the renewable energy zones were announced by the previous government, but the strategy marks the first detailed government assessment of timeframes and capital costs.

Projects with increased costs will be the Orana renewable energy zone (REZ) in the state’s central west, with costs increasing from $650 million to $3.2 billion, as well as the Hunter Transmission Project with costs increasing from $880 million to $990 million.

The total capital costs for the projects are estimated to be around $9.3 billion for the projects needed by 2030.

Previous estimates were not done by the NSW government and were carried out before detailed work was done to scope the projects. The updated costs reflect a larger project size which will deliver more network capacity, as well as changes to routes following community feedback and supply chain concerns.

“This strategy is the first time that the likely costs have been identified and published on the specific projects,” Sharpe said. “I am concerned that costs and timeframes have grown since they were first proposed in 2020.”

“The previous government was asked about costs and timeframes and never provided an answer. The addiction to privatisation in the energy sector has also made all aspects of these projects more difficult.”

Projects with increased delays include the central west Orana REZ and New England REZ. The Hunter Valley REZ previously had no estimated timeframe.

She added that as energy minister she wanted to be upfront about costs, timeframes and the challenges of the energy transition.

“My focus as energy minister will be to make sure that the roadmap is fit for purpose so that costs can be contained and infrastructure can be built as soon as possible,” she said.

The state government is racing to get more renewable energy, network and storage projects online to curb any possible energy shortfalls before the scheduled retirement of four out of five NSW coal-fired power stations over the coming decade.

Of particular concern will be Origin’s Eraring coal-fired power station, which is set to close as early as 2025. It comes after Liddell – the state’s oldest coal-fired power station – closed last month.

Perhaps one of the biggest concerns for the government and market will be ensuring reliable energy as coal-fired power stations are taken offline. But politicians and industry – including the Australian Energy Market Operator (AEMO) – have tried to ease concerns that with enough investment in renewables, lights will remain on.

For example, Sharpe has previously said that while the state will cope with the closure of Liddell, ongoing effort was needed to continue attracting investment in renewables.

“My job is to keep the lights on and to make that transition as quickly as possible. None of us want the coal-fired power plant being open longer than it needs to be, but we’ve also got a responsibility to make sure that households and businesses can go about their business,” she said last month.

The government has announced it will establish an energy security corporation: a publicly owned company that will accelerate renewable energy production.

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