RENEWABLE ENERGY - STATE OF THE INDUSTRY … · Web viewMay 2014 NSW Government position on...

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.

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

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

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Total installed capacity by fuel type in NSW in 2013

Coal58.2%

Gas11.5%

Oil0.9%

Renewable29.3%

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

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

Figure 2: Generation by fuel type in NSW in 2013

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Total generation by fuel type in NSW in 2013

Coal79.5%

Gas7.5%

Renewable12.9%

Growth in renewable energy generationRenewable 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

NSW Renewable Generation Excluding Snowy(including Solar Water Heaters)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GW

h

Figure 4: Difference in total fuel supply in NSW between 2001 and 20132

4.97

0.18 0.14 0.17 0.511.01

1.621.12

-9.43

-12.00

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

Fuel Type

Perc

enta

ge (%

)

Source: NSW Trade & Investment 2014

1 Bloomberg New Energy Finance 2014, internal document for NSW Trade & Investment.2 NSW Trade & Investment 2014, current at 1 May 2014.

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Future renewable energy opportunitiesThere 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 value of Critical or State Significant Development energy generation projects in the NSW planning system 3

New electricity generation projects in the NSW Planning process or with NSW Planning approval -

Estimated cost of project ($AUD millions)

13,314

4,587

50

5,000

Renewables GasDistillate/OCGTNatural Gas or Coal TBD


Figure 6: Generation capacity of Critical or State Significant Development energy generation projects in the NSW planning system4

New electricity generation projects in the NSW Planning process or with NSW Planning approval - Approved capacity

(MW)

8395.5

5019

150

4000

Renewables

GasDistillate/OCGT

Natural Gas or Coal TBD


3 NSW Trade & Investment 2014, current at 1 May 2014.4 NSW Trade & Investment 2014, current at 1 May 2014.

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

New electricity generation projects in the NSW Planning process or with NSW Planning approval - Direct project jobs (construction

and operational (FTE))

5488

2773

441000

Renewables

Gas

Distillate/OCGT

Natural Gas or Coal TBD


5 NSW Trade & Investment 2014, current at 1 May 2014.

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NSW Renewable Energy Action PlanThe 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 investment1. Improve the process of network connections2. Consider a more strategic and integrated approach to assessment of

renewable energy projects3. Remove technology specific barriers to investment4. Create an online information portal that provides information to investors5. Promote and facilitate investment opportunities with the appointment of a

renewable energy advocate6. Request IPART to estimate a benchmark range for a fair price for small-scale

generated solar energy7. Develop an information package for small-scale solar PV, solar hto water and

wind generation8. Support mid-scale solar PV to enable uptake of solar technologies where they

are most cost effective9. Engage with the Commonwealth Government to facilitate construction of the

Solar Flagships ProjectGoal 2: Build community support

10. Implement NSW wind energy planning guidelines11.Engage communities early and effectively in renewable energy projects12.Facilitate community ownership of five renewable energy projects13.Promote the benefits to consumers of switching to Green Power accredited

renewable energy14.Develop a draft NSW Smart Meter Policy

Goal 3: Attract and grow renewable energy expertise15. Investigate opportunities to support renewable energy experience

centres/demonstration projects16.Conduct renewable energy research roundtables17.Promote NSW as a leader of research and innovation in renewable energy18.Continue the recently created NSW Renewable Energy Innovation Prize19.Establish a working group to develop an advanced bioenergy initiative20.Support research & development in advanced bioenergy applications at the

University of New England21.Support research into applications of geothermal assisted power generation22. Identify opportunities to support the integration of geothermal projects and

coal-fired power stations23.Support research & development in wave and tidal technologies24.Continue to support research and deployment of smart grid technologies

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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 costThe Government will focus on the best value-for-money solutions to deliver our renewable energy commitments and support achievement of the national target. The cost of renewable energy varies considerably among technologies and over time.

NSW is open for business in renewable energy NSW has excellent renewable energy resources and the Government is working to attract renewable energy 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 that by 2018, solar technologies will begin to gain market share from wind energy as the cost of solar systems is greatly reduced. The forecast result is $18 billion invested in wind energy projects, $16 billion in both large and small-scale solar PV and $400 million in solar thermal technologies across Australia.6

Individual private sector investors will base their locational decisions not only on the energy resource and grid connection fundamentals in each state, but also on how open each jurisdiction is for business. The Government is seeking to attract a large proportion of this investment 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.

6 Bloomberg New Energy Finance 2011.7 Australian Energy Market Operator 2012.

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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 CSIRO Solar Tower 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.

8 Australian Bureau of Resources and Energy Economics 2012, ‘Technology Assessment Report’, July 2012.

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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 healthThe 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 / BioenergyNSW is well placed to lead the development and supply of sustainable biomass for electricity and transport. The Government will continue to support innovative R&D of the bioenergy industry, including off-grid generation opportunities.

NSW Energy from Waste Policy StatementThe 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

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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.

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

While the technology is mature, there are future opportunities to install small-scale facilities on dams, weirs, water and sewage treatment plants, flow control structures and water supply pipelines, and to augment existing hydro plants. There is an estimated total of more than 1,000 MW in potential generation at several dozen sites in NSW.

A recent example is the new 3.7 MW hydroelectricity plant at Prospect Reservoir in Western Sydney. The Government is researching improvements so future small hydropower projects on dams and weirs are fish-friendly and support the needs of local and downstream water users.

NSW has excellent hydropower R&D capacity at facilities such as the University of NSW’s Water Research Laboratory. There is strong potential to export our knowledge to assist the development of very large hydropower resources in nearby nations in Southeast Asia and Australasia.

Wave and tidalNSW has superior wave and ocean resources with a long coastline exposed to good ocean swells. The NSW coast also possesses a range of tidal energy resources at ocean, lagoon and river mouths.

These technologies are highly developmental, both in Australia and internationally. The Government has committed to encourage further R&D in wave and tidal technologies in NSW under the Plan.

Geothermal NSW has potential for enhanced geothermal systems resources (‘hot dry rocks’) close to customers, generators and networks, with an estimated 55 GW of potential electricity generation if 20 percent of the total estimated heat energy is extracted.

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According to industry research, NSW may have the potential to generate up to 46 times more energy from geothermal resources than currently generated using fossil fuels.NSW is supporting resource mapping of geothermal energy potential, and has funded research into rock thermal properties to map the geothermal landscape in theSydney Basin. It has also commissioned a scoping study to identify a resource base, possible markets and current impediments to local small-scale geothermal power generation projects.

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

The Government is also facilitating resource discovery by extending the mineral exploration licensing regime to include geothermal resources. Licences have been granted to explore for geothermal energy in the Sydney and Gunnedah Basins.

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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AppendixKey renewable energy projects in NSW

Renewable energy projects in the NSW Planning system/ with Planning approvalEnergy 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 Yass Valley, Boorowa and

Upper Lachlan ShireWind

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

Liverpool Range 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

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Rugby Wind Farm Boorowa Repower Australia

Wind 290 170 150 20 390

Rye Park 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, Yass Valley 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

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Planning Approved ProjectsEnergy project Location (LGA) Owner Technology Approved

capacity (MW)

Jobs created (FTE)

Jobs - construction

Jobs - operational

Estimated cost of project

($AUD millions)

Black Springs Wind Farm

Oberon Wind Corporation

Australia Limited

Wind 19 33 32 1 33

Bodangora Wind Farm

Wellington Infigen Energy

Development Pty Ltd

Wind 120 54 50 4 200

Broken Hill Solar Farm

Unincorporated AGL Energy Limited

Solar 53 153 150 3 200

Capital II Wind Farm Palerang Capital Wind Farm 2 Pty

Ltd

Wind 193 105 100 5 180

Capital Solar Farm Palerang Infigen Suntech

Australia Pty Ltd

Solar 50 55 50 5 150

Collector Wind Farm Upper Lachlan / Palerang RATCH-Australia

Corporation

Wind 160 110 100 10 350

Conroy's Gap Wind Farm

Yass Valley Epuron Wind 30 55 50 5 50

Flyers Creek Blayney Flyers Creek Wind Farm

Pty Ltd

Wind 132 53 50 3 200

Glen Innes Glen Innes - Severn Glen Innes Wind Power

Wind 75 43 40 3 150

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Kyoto Energy Park Upper Hunter & Muswellbrook

Pamada Pty Limited

Wind 137 65 50 15 45

Solar

HydroManildra Solar Farm Cabonne Infigen

Suntech Australia Pty

Ltd

Solar 50 55 50 5 150

Moree Solar farm - Fotowatio Pacific

Hydro

Moree Plains Shire Moree Solar Farm Pty Ltd

Solar 56 105 100 5 150

Moree Solar Farm - Infigen Suntech

Moree Plains Shire Infigen Suntech

Australia Pty Ltd

Solar 60 55 50 5 180

Nyngan Solar Farm Bogan Infigen Suntech

Australia Pty Ltd

Solar 100 55 50 5 300

Sapphire Wind Farm Inverell, Glen Innes Severn Wind Prospect

CWP Pty Ltd

Wind 425 108 100 8 1,250

Silverton Wind Farm Unincorporated Area, Broken Hill and Wentworth

Shire

Silverton Wind Farm

Developments Pty Ltd

Wind 1,000 820 700 120 2,200

White Rock Wind Farm

Glen Innes Severn, Inverell, Guyra

Epuron Wind 340 77 70 7 350

Totals (NSW Planning approved projects)2,999 2,001 1,792 209 6,138

Total 8,396 5,488 4,479 1,009 13,314

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