NSW to kick-start renewable energy investment

The NSW government has called on business to pitch projects for its $4.4 billion renewable energy zone to kick-start investment, amid a slowdown in new wind and solar commitments due to national energy policy uncertainty and a global recession triggered by the coronavirus.

Wind, solar and energy storage companies have two weeks to flag interest in building parts of the 3000MW renewable energy zone (REZ) in the central south-west, centred around the town of Dubbo.

The NSW government wants companies and developers to detail the scale and type of projects that could be established in the region to generate enough energy to power about 1.3 million homes each year.

“The registration of interest process is an important next step to hear from proponents about existing and proposed energy, storage and emerging technology projects that could form part of the REZ," said Matt Kean, NSW Minister for Environment and Energy.

"This information, which will include project details, location, type, size and development status, will support technical design, planning and further market engagement on the REZ."

Co-ordination of policy is key to building new electricity generation that boosts state and national grid reliability and electricity affordability as ageing coal-fired power plants retire, like AGL's Liddel plant 243 kilometres from Sydney, slated to close after the 2022-23 summer.

As part of NSW's Net Zero Plan, the government wants to build another two renewable energy zones in the south-west and New England regions, unlocking up to up to 17,700MW of new generation capacity from wind, solar and storage projects.

“I want NSW to have some of the cheapest, most reliable and cleanest electricity in the world. Bringing more renewables into our grid in a strategic, co-ordinated manner is fundamental to achieving this goal," Mr Kean said. Registration of interest closes on Friday, June 5.

NSW's plan to kick-start investment in renewable energy comes as new wind and solar commitments collapsed across Australia by more than 50 per cent last year due to mounting regulatory risks, under-investment in transmission, and the absence of a nationally co-ordinated energy and climate change policy.

A coronavirus-triggered global recession is also slated to hamper investment in renewables as the COVID-19 pandemic has set in motion the largest drop in global energy investment in history.

Spending is expected to plunge in every major sector this year – from fossil fuels to renewables and efficiency – the International Energy Agency said in a new report released on Wednesday.

The unparalleled decline is staggering in both its scale and swiftness, with serious potential implications for energy security and clean energy transitions.

At the start of 2020, global energy investment was on track for 2 per cent growth, which would have been the largest annual rise in spending in six years.

But after the COVID-19 crisis brought large swathes of the world economy to a standstill in a matter of months, global investment is now expected to plummet by 20 per cent, or almost $400 billion (A$602 billion), compared with last year, according to the IEA’s World Energy Investment 2020 report.

“The historic plunge in global energy investment is deeply troubling for many reasons,” said Dr Fatih Birol, the IEA’s Executive Director.

At New Energy Solar's annual general meeting on Wednesday, the Australian Securities Exchange-listed large-scale solar farm investor confirmed the IEA's outlook, warning shareholders that a COVID-19 induced recession could hamper investment and access to finance.

"The pandemic has created significant stress in financial markets and impacted on the general availability and cost of equity and debt," said Jeffrey Whalan, Chairman of New Energy Solar.

"Further, the significant drop in demand for energy created by the global response to the pandemic has seen significantly lower energy prices – including electricity prices." New Energy Solar stock closed flat at $1.07.