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Transition to a secure, cost-effective, low emission energy supply

Transition to a secure, cost-effective, low emission energy supply

As global demand for low emission products and services continues to grow and mature, these technologies move down the cost curve. As prices continue to fall, there will be opportunities to support economic growth, jobs, globally competitive businesses and exports.

When combined with storage technologies, such as batteries and pumped hydro, renewables are now the cheapest forms of new, reliable electricity generation. These economics are driving their deployment around the world, creating construction and maintenance jobs.

The Net Zero Plan outlines how the NSW Government is planning to deliver three Renewable Energy Zones in the Central West, New England and South West to replace retiring generators with renewable energy. Over the next 20 years these Zones are anticipated to bring up to 17,700 megawatts of cheaper, renewable power into the grid, drive up to $23 billion of private sector investment and create about 2000 construction jobs each year in regional NSW.

Transport is leading the way in regards to using renewable energy, with emissions from the operation of the $8.3 billion Sydney Metro Northwest fully offset with renewables through a corporate renewable power purchase agreement.

Large Scale Generation Certificates

Once renewable electricity is generated and fed into the grid, it is indistinguishable from electricity generated from fossil fuels. The only way to know that renewable energy was produced is to assign it a Renewable Energy Certificate (REC). Every megawatt hour that is produced by an accredited renewable electricity generator and fed into the grid is eligible for an REC under Australia’s Renewable Energy Target (RET). The Clean Energy Regulator distinguishes between small-scale (<100kW) and large-scale (>100kW) renewable energy generation. RECs generated by large-scale generation are called Large Scale Generation Certificates (LGCs). Accredited renewable energy generators are awarded one LGC for every megawatt hour of renewable electricity generated. LGCs are separate from purchased electricity and as such can be bought and sold separately.

Sourcing Renewable Electricity from the Grid

By purchasing and surrendering a number of LGCs equivalent to the electricity you source from the grid, you offset the retired LGCs against your electricity consumption – effectively sourcing 100 per cent renewable electricity through the grid. Although technically an offset, purchasing and retiring LGCs is the mechanism for sourcing renewable electricity from the grid. This is how authorised entities (typically electricity retailers) achieve the RET.
A simplified schematic of the large scale renewable electricity market is shown in Figure 22.

Figure 22 – Large scale renewable electricity market

The easiest way to source renewable electricity through the grid is to purchase GreenPower, renewable energy generation accredited by the Australian Government. GreenPower accredits electricity retailers to purchase and surrender LGCs when the customer purchases GreenPower. Although GreenPower comes at a premium to grid electricity contracts, it is straightforward and a good option for smaller energy users who may not be able to enter into a Power Purchase Agreement (PPA).

Larger electricity users typically source renewable grid electricity using some form of renewable Corporate Power Purchase Agreement. A Corporate Renewable PPA is an agreement for the supply and sale of electricity from a renewable source, typically for a fixed price over a longer term. A PPA can provide lower electricity prices, as well as a hedge to protect against future price fluctuations, while the energy generator benefits from certainty of revenue.

Six principles for Future Transport

The Future Transport 2056 Strategy is focused on six key principles for the future of mobility in the state, which together aim to positively impact the economy, communities and environment of NSW.

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