A NSW Government website

What the Roadmap means for you

The NSW Electricity Infrastructure Roadmap

The Roadmap has a range of opportunities for the people of NSW. 

Households

The Roadmap will deliver value for money by introducing more renewables into the grid and put downward pressure on electricity bills.

As with any market change, there is a time of transition, and benefits from that change will be delivered at different times. We will all contribute to the cost of this investment based on our energy use. 

Roadmap costs will primarily support investment in new generation and network operators to build new network infrastructure. These costs began to be passed through from mid-2023. 

See below for more information about how these costs are determined. 

Roadmap costs will not be itemised separately on household bills. They will instead be bundled with other network charges, which are largely related to building, maintaining and operating the poles and wires that deliver electricity to your home. This is similar to the approach of other schemes, such as the Federal Government’s Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme, as well as the NSW government’s Climate Change Fund including the Energy Savings Scheme. The other significant part of bills are energy usage charges.

We have helpful information on how to understand your energy bill. There are also many opportunities available to help you bring down the cost of your electricity bills.

If you are having difficulties paying your bills, the NSW Government has separate programs in place to assist.

Learn more about help for households facing energy bill stress.

Business and industry

The Roadmap will deliver value for money for your business by introducing more renewables into the grid and put downward pressure on businesses’ electricity bills.  

As with any market change, there is a time of transition, and benefits from that change will be delivered at different times. Most businesses will contribute to the cost of this investment based on their energy use. 

Roadmap costs will primarily support investment in new generation and network operators to build new network infrastructure. These costs will begin to be passed through from mid-2023. 

See below for more information about how these costs are determined. 

Roadmap costs will not be itemised separately on businesses’ bills. They will instead be bundled with other network charges, which are largely related to building, maintaining and operating the poles and wires that deliver electricity to your business. This is similar to the approach of other schemes, such as the Federal Government’s Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme, as well as the NSW government’s Climate Change Fund including the Energy Savings Scheme. The other significant part of bills are energy usage charges.

Under the EII Act, some businesses are exempt from paying costs associated with the Roadmap. These businesses include: 

  • persons exempt from the Energy Savings Scheme (ESS) (under section 22 of Schedule 4A of the Electricity Supply Act 1995); or 
  • persons buying electricity to use in the production of green hydrogen.

Persons exempt from the ESS refers to an industry or activity that is both emissions intensive and trade exposed (EITE).

Providing some form of exemption supports our industry in NSW to be competitive and prosperous. This is consistent with the ESS and the national Renewable Energy Target. 

As such, EITEs are exempt from 90% of the costs associated with electricity generation under the Roadmap. 
Green hydrogen producers are exempt from 90% of all Roadmap costs up to and including 2028. This exemption supports green hydrogen producers while the industry is still in its infancy, and helps position NSW as a green hydrogen superpower. 

Green hydrogen facilities commencing in 2029 will have a reduced exemption rate of 60%. Likewise, facilities commencing in 2030 will have a reduced exemption rate of 30%. For facilities commencing after 2030, no exemption will apply. 

This reflects the industry’s growing maturity and viability, reducing the need for industry support.

How Roadmap costs are determined

Roadmap costs will support new generation and network operators build new network infrastructure. Examples of Roadmap costs include:

  • Network infrastructure costs: to fund the building and operation of electricity transmission infrastructure projects. These costs are determined by a process involving the Infrastructure Planner (EnergyCo), the Consumer Trustee (AEMO Services) and the Australian Energy Regulator (AER) to ensure the prudent, efficient and reasonable capital costs for development and construction of the network infrastructure projects. 
  • Long-Term Energy Service Agreements: to fund costs associated with underwriting contracts (known as Long-Term Energy Service Agreements, or LTESAs) for generation, firming, and long-duration storage. The Consumer Trustee is responsible for running competitive tender rounds to offer LTESAs. These agreements will help generators to produce the lowest cost and highest reliability for electricity consumers. 
  • Administrative costs of Roadmap entities

The AER and Distributors, or Distribution Network Service Providers (DNSPs), are key to the implementation of the Roadmap. 

In February each year the AER is required under the NSW Electricity Infrastructure Investment Act 2020 (EII Act) to determine the annual contribution required to be recovered from distribution businesses to cover the costs of implementing the Roadmap over the coming financial year.

The AER published its second Roadmap contribution determination on 21 February 2024. The total contribution determination amount to be recovered from DNSPs for 2024-25 is $341.24 million.

The AER published its first contribution determination on 24 February 2023.

The increase to the 2024-25 contribution determination reflects the significant progress that is being made to roll out the NSW Electricity Infrastructure Roadmap, and to delivering a more reliable and affordable source of electricity for every electricity consumer across the State.

The EII Act sets out how Roadmap costs are to be managed through the Electricity Infrastructure Fund (the Fund). Distributors pay their contributions into the Fund, based on the AER’s contribution determination.

Distributors then recover the costs from consumers as part of the network charges on electricity bills. 

Distributors operate the power poles, wires, transformers and substations that enable the movement of electricity from the transmission network to households, businesses and industry across the state. 

There are 3 distributors in NSW, each operating across different areas of the state. They are: 

Modelling Roadmap costs and benefits 

We use electricity market modelling to help us understand how the Roadmap benefits the people of NSW. 

The modelling looks at forecast wholesale and retail electricity prices and compares them to forecast prices if NSW had never implemented the Roadmap.

Modelling undertaken in 2020 has become outdated due to changes in the energy market, including demand assumptions, technology costs and commodity prices. 

To address this, we have developed an updated electricity market modelling approach that is explained in the NSW Electricity Infrastructure Roadmap benefits modelling report. This approach allows us to compare the outcomes for the state in the following two scenarios:

  1. where the Roadmap is being implemented (based on Consumer Trustee modelling), and 
  2. an alternative scenario where the Roadmap has not been implemented (based on NSW Government modelling).

This analysis will be updated periodically and will inform the evaluation of the policy as part of a statutory review in 2026/27.

Draft estimates in June 2023 showed a forecast saving to consumers of $10.6 billion (net present value) due to the Roadmap over the next 20 years. Further information is included in the Draft 2023 Infrastructure Investment Objectives report, prepared by AEMO Services as the NSW Consumer Trustee.

Updated consumer benefits are included in the 2024 NSW Electricity Infrastructure Roadmap benefits modelling outcome report, published in May 2024. This updated report follows the same modelling framework as published in the 2023 Draft report, with a description of updated assumptions where relevant. The 2024 modelling report estimates that the Roadmap is forecast to save consumers $25.5 billion (net present value) over the next 20 years, compared to a no Roadmap scenario.