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NSW Climate and Energy Action

Memorandum of Understanding

The NSW and Australian governments are jointly funding over $2 billion in energy and emissions reduction initiatives, while also ensuring that NSW has a reliable and affordable energy system. 

A Memorandum of Understanding (MOU) sets out a clear, long-term path to help the state meet its target of net zero emissions by 2050. The MOU will see reduced emissions across key sectors, including agriculture, mining and transport.  

As well as reducing emissions, the initiatives set out in the MOU improve the affordability and reliability of the NSW electricity system, benefiting households, businesses and communities. 

Key initiatives in the MOU include: 

  • improving transmission interconnection and network access, including accelerating and delivering: 
    • NSW’s first Renewable Energy Zone  
    • the HumeLink project to unlock existing and future generation from Snowy Hydro   
    • upgrades to the Queensland to NSW interconnector 
  • keeping existing electricity generation plants available and reliable until they close 
  • setting a target to inject an additional 70 petajoules of gas per year into the NSW market, and agreeing to a gas market review if this target is not met by 2022 
  • ensuring emissions reduction in the electricity sector stays on track by supporting new generation investment in NSW. 

Around $2 billion of the MOU supports initiatives that reduce emissions in non-electricity sectors, including: 

  • a $450 million allocation from the Australian Government's Climate Solutions Fund to NSW based projects that support businesses, farmers and land managers to take practical, low cost abatement actions 
  • $450 million to support emissions intensity reduction for large NSW-based sources of emissions, to shift their plant, equipment and other assets to low emissions alternatives 
  • fast tracking the uptake of clean technology through the research, develop and commercialisation of emissions reduction technologies, establishing NSW as a clean technology hub 
  • supporting the commercialisation of hydrogen technologies in NSW, including recommendations arising from the National Hydrogen Strategy 
  • funding initiatives to drive electric vehicle infrastructure, model availability electric vehicle fast charging stations, and private fleet procurement by 2024 
  • energy efficiency initiatives that reduce electricity bills, ease pressure on the electricity grid and reduce emissions 
  • commercialise and deploy technologies to reduce emissions from the extraction, preparation and use of coal 
  • supporting primary industries productivity and abatement – helping producers and landowners in regional NSW to commercialise low emissions technologies and maximise revenue from carbon markets.   

Joint Policy Statement on the NSW electricity system following the closure of the Liddell Power Station in April 2023 

On 24 April 2021, the NSW and Australian governments signed a Joint Policy Statement on the NSW electricity system following the closure of the Liddell Power Station in April 2023.