The Government is setting a target for the electricity sector to deliver 1,000 megawatts of new dispatchable energy to replace the Liddell power station before it closes down in 2023.
To protect families and businesses against the risk of price rises, the Government will step up and back a new gas power plant in the Hunter Valley if the sector doesn’t replace Liddell’s capacity.
The Liddell Taskforce found closing the plant without adequate dispatchable replacement capacity risks prices rising by around 30 per cent over two years, or $20 per megawatt hour to $80 in 2024 and up to $105 per MWH by 2030.
Prime Minister Scott Morrison said the Government’s JobMaker plan was focused on delivering affordable, reliable energy that would ultimately support the economy and new jobs.
The Prime Minister said the potential price increases were unacceptable and would represent a huge hit to families, businesses and job creating industries in NSW if the energy generated by Liddell wasn’t replaced.
“Affordable, reliable and a secure electricity supply is critical to our JobMaker plan for households, businesses and industry,” the Prime Minister said.
“We won’t risk the affordability and reliability of the NSW energy system and will step in unless the industry steps up.
To ensure we do not have a scenario without replacement, the Government is giving the private sector until the end of April 2021 to reach final investment decisions on 1000 MW of dispatchable capacity, with a commitment for generation in time for summer 2023-24.
However, if, by the end of April 2021, the private sector has not delivered on the target, the Government will take necessary steps to ensure the required dispatchable capacity is built.
To this end, Snowy Hydro Limited is developing options to build a gas generator in the Hunter Valley at Kurri Kurri should the market not deliver what consumers need.
Minister for Energy and Emissions Reduction Angus Taylor said the market has a clear obligation, as an essential service, to step up and deliver affordable, reliable power for consumers.
Minister Taylor said that since 2010, investment in dispatchable capacity had slowed to a trickle, with only around 1.6 GW of new dispatchable capacity connected in the national electricity market.
“The Government has always been clear – we need to see life extension or like-for-like replacement of Liddell,” Minister Taylor said.
“Over the last decade, the private sector has not built a single new reliable power plant in NSW.
“And in the five years since the closure of Liddell was first announced, the private sector has only committed to a single dispatchable generation expansion – a 100MW addition to the existing Bayswater plant. This falls far short of what is required.
“The Government expects industry to step up and deliver the new dispatchable capacity required to ensure a reliable and affordable energy system.
“If industry steps up, we’ll step back.”
The Prime Minister said the Government would also work with state governments through a program worth up to $250 million to accelerate three critical projects – the Marinus Link, Project Energy Connect and VNI West interconnectors.
“These links will help put downward pressure on prices, shore up the reliability of our energy grid and create over 4,000 jobs,” the Prime Minister said.
“Our plan for Australia’s energy future is squarely focused on bringing down prices, keeping the lights on and reducing our emissions and these interconnectors bring us a step closer to that reality.”
Together with the Government’s existing support for HumeLink and the QNI Interconnector, this means we are accelerating all priority transmission projects identified in the AEMO Integrated System Plan.
The Government’s plan will hold the energy companies to account and maintain downward pressure on electricity prices while simultaneously developing the backbone of a reliable, lower emissions ³Ô¹ÏÍøÕ¾ Electricity Market for the next decade and beyond.
