AEMO Services recently conducted its first round of tenders for Long-Term Energy Service Agreements and Renewable Energy Zone Access Rights to support the transition to renewables in NSW. 16 projects were shortlisted, totaling 4.3 GW of generation and storage in its first auction.
To enable the transition from coal to renewables, investment in NSW is likely to be over $32B to allow renewables to fill the gap as the last 5 coal fired generators in the state retire over the next 10 years. AEMO Services will be running two auctions per year until 2030 to source a total of 14 GW. The next auction is likely in July 2023.
Replacing the last five coal generators with renewables and storage should lead to lower energy prices in the long run because:
- Renewable energy sources are plentiful in Australia, which should eventually lead to price stability and security of supply.
- The use of renewable energy reduces our dependence on fossil fuels, which are subject to price fluctuations and geopolitical tensions.
- The deployment of energy storage technologies such as batteries can help aggregate renewable energy sources better, making it easier to mix them to meet NSW’s energy needs.
The 16 selected projects will have to submit their financial bids to AEMO Services by 10th February, with unsuccessful projects able to resubmit in future rounds.
We are looking forward to seeing more projects reach financial close to bring more renewable energy to the grid as this will enable our Edge Utilities Power Portfolio to access renewables at more competitive prices for our customers.