Manufacturers, clean energy investors back NSW push for cleaner energy
The most energy-intensive manufacturer in Australia says NSW’s bold renewables plan is desperately needed to deliver cleaner, cheaper and more reliable electricity.
Tomago Aluminium, which consumes 10 per cent of NSW’s power, has been warning the state government that rising energy prices could have a significant impact on its NSW operations.
Chief executive of Tomago Matt Howell said price and reliability were crucial for the aluminium smelter, which is the largest energy user in the country.
“Anything that delivers cleaner, cheaper and more reliable energy is something that we would be keen to explore,” Mr Howell said.
The NSW government has revealed the most ambitious energy plan in the country, in which it hopes the private sector will build $32 billion of critical infrastructure by 2030.
Some of Australia’s largest clean energy investors have thrown their support behind the plan, but big power companies say it needs further scrutiny.
A coalition of local investors across 49 renewable energy assets including Macquarie Capital, John Laing, RWE Renewables and Lighthouse Infrastructure expressed confidence in the energy “road map” released on Monday.
“This road map is a welcome plan for private-sector investors, harnessing the power of private markets to accelerate NSW’s renewable energy goals,” Clean Energy Investor Group chairman Simon Corbell said.
However, representatives for Australia’s top power suppliers including AGL, Origin Energy and EnergyAustralia urged caution and raised concerns about the plan’s potential to undermine existing efforts to improve the east-coast power grid. They warned the intervention could distort investment signals for private generators by protecting new projects from low prices.
“We understand the desire of the NSW government to ensure reliability and manage energy costs – we share those concerns,” Australian Energy Council chief executive Sarah McNamara said. “But there are existing mechanisms in the National Electricity Market to encourage investment in new generation.”
Given the interconnectedness of the power system, Ms McNamara said energy reliability was best managed at a national level rather than state-by-state.
The nation’s largest power generator, AGL, said it would “take some time” to review the detail of the announcement and engage with the state government to better understand the implications.
The plan will create 6300 construction jobs and 2800 ongoing jobs, mostly in regional NSW, and deliver 12 gigawatts of renewable energy and two gigawatts of storage, mainly through pumped hydro.
There will be $50 million in the this month’s state budget for grants for pumped hydro projects and legislation to give the government the functions and power to deliver the plan will be introduced to NSW Parliament as early as this week.
NSW Energy Minister Matt Kean said the new plan would lead to lower prices by ending the policy uncertainty which had discouraged investment, while driving investment into renewables to slash emissions.
“Our road map has been designed to deliver the cheapest and most reliable energy to NSW citizens,” Mr Kean said. “We’re providing the right market signal to encourage the private sector to build the generation storage.”
The plan has also united the Coalition, Liberals and the Nationals – having previously clashed over energy policies.