The Energy Security Target Monitor is responsible for assessing and monitoring whether NSW will have sufficient firm capacity (generation, firming and storage, transmission capacity) to meet the Energy Security Target under different scenarios.
The Energy Security Target is the amount of reliable electricity needed to meet customer demand during a summer heat wave, plus a buffer. The Energy Security Target is designed to provide market certainty as it ensures there will be reliable supplies of electricity available to meet demands over the medium term.
The current Energy Security Target Monitor is the Secretary of the NSW Department of Climate Change, Energy, the Environment and Water. Prior to 2025, it was the Australian Energy Market Operator (AEMO).
Energy Security Target Monitor Reports
The Energy Security Target Monitor Report defines the Energy Security Target for the next 10 financial years. The Reports will consider:
- the amount of reliable energy needed to meet demand
- any anticipated shortfalls and recommends actions to take in the event of any shortfalls over the medium term.
Read the latest report from AEMO, ESTM Report October 2024.
Previous reports can be found below:
On 23 May 2024, the NSW Government announced that Origin Energy Limited had agreed to operate Eraring Power Station until August 2027 in return for Government underwriting against a share of its potential financial loss. For more information about the agreement, please see here.
The ESTM Report October 2024 highlights additional actions may be necessary to ensure a reliable electricity supply following the scheduled retirement of Eraring power station in 2027, and Vales Point and Bayswater power stations in 2033. The Report also highlights that timely delivery of transmission infrastructure is critical to unlock intra-regional transfer capacity.
Some of the actions the NSW Government has taken to address this potential shortfall of electricity include:
- Directing ASL (formerly AEMO Services) to tender for new firm capacity that can be online by the summer of 2027-28, prioritising projects that can supply the Sydney, Newcastle and Wollongong areas.
- Allocating NSW 900 MW of new dispatchable capacity projects in the Capacity Investment Scheme Tender 3.
- Legislating via the Energy Amendment (Long Duration Storage and Investment) Act 2024 an additional minimum objective of 12 GWh of long duration storage by 31 December 2033 to meet the reliability standard in NSW.
- Offering Peak Demand Reduction Scheme incentives to homes and small businesses to connect their solar batteries to a Virtual Power Plant (VPP). A Virtual Power Plant lets consumers to sell excess electricity back to the grid on an ongoing basis. Consumers can use this incentive together with the Australian Government’s Cheaper Home Batteries Program discount.
- Establishing of the Energy Security Corporation to make investments in storage projects, address gaps in the current market, and improve the reliability of our electricity network.
- Delivering the Waratah Super Battery as a network standby battery. This super battery will ensure a reliable supply of energy across the state, especially during times when it is needed the most, like in the event of power surges during a storm or bushfire.
- Providing grants to Transgrid and the AEMO for additional grid connection engineering resources.
From 2025, Energy Security Target Monitor Reports will be published by the NSW Government. AEMO will continue providing energy modelling services for the Energy Security Target for NSW.
Firming Tender for Long-Term Energy Service Agreements (LTESAs)
The Minister for Energy has directed ASL to conduct a competitive tender for new projects that can supply around 500MW of firm capacity by 2027-28, prioritising projects located in the Sydney, Newcastle and Wollongong sub-region.
This is the second NSW Electricity Infrastructure Roadmap tender for firming infrastructure. It will help meet the forecast shortfall in firm capacity for the summer of 2027-28 that was identified in the 2024 Energy Security Target Monitor Report. The shortfall is due to the planned closure of Eraring Power Station in 2027 before new generation and transmission projects are up and running.
The tender will seek bids for firming infrastructure like batteries, gas generation and virtual power plants, that can rapidly supply electricity to the grid or reduce the use of electricity at short notice.
Successful projects will join those supported in the state’s first firming tender (Roadmap Tender Round 2) in 2023:
- Enel X’s large scale virtual power plant
- AGL’s Liddell battery
- Akaysha Energy’s Orana battery
- Iberdrola’s Smithfield battery.
For more information about Tender Round 2 and other tender outcomes, please see ASL tenders.
Energy Security Corporation
The Energy Security Corporation (ESC) will make investments in storage projects, addressing gaps in the current market, and improving the reliability of the electricity network.
Eligible projects could include community batteries, as well as virtual power plants that allow households and communities to pool electricity generated from rooftop solar panels. These virtual power plants would decrease reliance on the grid and reduce power bills.
Delivering the Waratah Super Battery
To ensure NSW continues to have reliable energy supply following the closure of the Eraring Power Station, the NSW Government is delivering the 850MW /1680 MWh Waratah Super Battery.
The Waratah Super Battery will be the largest network standby battery in the Southern Hemisphere.
The Waratah Super Battery, together with other minor transmission upgrades, will allow Sydney, Newcastle and Wollongong consumers to access more energy from existing electricity generation. More information is available on the EnergyCo project page.
How the Waratah Super Battery will support reliable energy supply
Electricity supply to Sydney, Newcastle and Wollongong comes through several transmission lines from the north, west and south of NSW.
These transmission lines connect electricity consumers to electricity generation and have capacity limits on how much energy they can safely carry at any one time.
Currently, some of this capacity is kept in reserve to ensure the line stays within its technical limits in case there is a ‘shock’ to the system, such as a lightning strike or bushfire.
The Waratah Super Battery will act as a ‘shock absorber’ for the electricity grid, removing the need to hold transmission capacity in reserve so that transmission can be used to transfer additional energy to consumers from existing generation.