The NSW Government has appointed the Australian Energy Market Operator (AEMO) as the Energy Security Target (EST) Monitor for the Electricity Infrastructure Roadmap (the Roadmap), under the Electricity Infrastructure Investment Act 2020 (EII Act).
Under the appointment, AEMO is responsible for calculating and setting a 10-year energy security target for NSW. This 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.
AEMO is also responsible for assessing and monitoring whether the firm capacity (generation, firming and storage, transmission capacity) is sufficient to meet the energy security target under different scenarios.
NSW Government response to Energy Security Target Monitor Reports
The Energy Security Target lets the energy market know how much new infrastructure the NSW Government expects we will require to meet our energy needs.
The Energy Security Target Monitor (ESTM) Report shows the amount of reliable electricity needed in NSW to service maximum consumer demand. For example, the report would accommodate for a summer heatwave plus a buffer.
AEMO provides regular Energy Security Target Monitor Reports.
The ESTM Report defines the Energy Security Target for the next 10 financial years. In doing so, it also considers:
- 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 at ESTM Report October 2023.
Previous reports can be found below:
Consistent with the October 2022 Report, the October 2023 Report highlights that additional actions may be necessary to ensure a reliable electricity supply following the scheduled retirement of Eraring power station in August 2025.
Some of the actions already taken to address this potential shortfall of electricity include:
- Six projects of firming infrastructure being awarded Long-Term Energy Service Agreements (LTESAs) by the Consumer Trustee as an outcome of Tender 2.
- Two additional generation and three long-duration storage projects being awarded LTESAs by the Consumer Trustee as an outcome of Tender 3.
- Establishing 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 provides virtual transmission network services, which gives more flexibility and access to more energy from existing generators.
Firming Tender for Long-Term Energy Service Agreements (LTESAs)
The second tender for firming infrastructure was open for Project Bids from 3 April to 21 May 2023. This tender was for technologies that can be dispatched during times of peak electricity demand. Examples of firming technologies include battery storage, thermal storage, gas peaker plants and loads capable of participating in the wholesale demand response mechanism.
On 29 June 2023, the Commonwealth and NSW Governments announced the Commonwealth would commit additional funds for up to 550 MW of firming infrastructure as the first investment from the Commonwealth’s Capacity Investment Scheme (CIS).
Six projects were awarded from the tender process, which will provide 1,075 MW of firming capacity to the network.
The new firming infrastructure is expected to provide energy to the Sydney-Newcastle-Wollongong sub-region during times of peak consumer demand from December 2025.
For more information about Tender Round 2 and other tender outcomes, please see here.
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.