Energy Consumption

Energy consumption decreased by 2% from 1,169 to 1,142 petajoules (PJ) between 2010 and 2019 and per capita consumption decreased by 3.2% between 2017–19.

Of the 19% of electricity supplied by renewable sources, solar and wind combined provided 14% and hydro 3%. The transport sector remained the biggest energy user at 47% of the total energy use in NSW and the ACT.

Why energy consumption is important

The percentage of renewable energy in the NSW electricity supply is increasing. Between 2015 and 2020 the amount of wind and solar energy in NSW electricity generation more than doubled, partly due to generation from rooftop solar panels and large-scale solar and wind farms. NSW is one of the leading states in adding renewable energy to the electricity market.

Four out of the five coal-fired power stations supplying around three-quarters of the state’s electricity are scheduled to close in the next 15 years. We are moving towards a two-way energy system where more consumers are installing their own rooftop solar systems and exporting energy back to the grid. Communities are looking to new local renewable energy technologies and models, such as trading energy and sharing solar energy with their neighbours.

Status and Trends

In 2019–20, 81% of electricity in NSW came from non-renewable sources such as oil, coal and gas. This was a 6% decline since the 2018 State of the Environment report.

From June 2017 to June 2020, total NSW and ACT electricity generation remained stable with a slight increase of 0.5% as the population continued to grow, while electricity consumption per capita declined by about 6%. The Gross State Product (GSP), which experienced above trend growth for the four years to 2018–19, contracted by 0.7% in 2019–20, likely due to impacts of COVID-19. However, the economy has since rebounded, growing by 2.4% from June 2020 to June 2021. Since then, the state has experienced a faster than expected rebound in economic activity and continues to see a strong recovery from the pandemic-driven collapse in the middle of 2020.

In 2018–19, the transport sector used almost half (47%) of the total energy used in NSW and the ACT–up from 43% in 2008–09.

The industrial sector used 33% of energy, with the residential and commercial sectors accounting for 11% and 9% respectively.

Electric vehicles (EV) – which both use and store energy – will become increasingly common. Currently, the sale of EVs is low (about 0.8% of new vehicle sales) but is projected to increase rapidly, with two million EVs expected on Australian roads by the mid-2030s.

The Spotlight figure 3 shows the change between 2010–19 in energy consumption, energy use by the transport sector and the contribution of renewable energy sources to total energy demand. Total energy consumption generally decreased between 2010–19 with slight fluctuation, while the transport sector share of energy use slightly increased by 4%.

The contribution of renewable energy sources to the state’s total electricity generation increased substantially between 2015–19.

Pressures

The electricity grid was designed to operate as a one-way power delivery system through big energy generators, such as coal-fired power stations, delivering electricity via poles and wires to homes and businesses.

While electricity demand from the grid is expected to decline with increasing adoption of energy efficient appliances and machinery and rooftop solar and battery systems, it is expected to increase with the predicted growth in electric vehicle charging and related infrastructure.

However, the increase in rooftop solar photovoltaics (PV) sending power back into the grid and other distributed energy resources (DER), such as battery storage, electric vehicles and chargers and smart meters, means these behind the meter systems need a power system that can evolve and allow DER to be integrated. Demand for DER is predicted to grow; by 2050, it may contribute up to 45% of the nation’s electricity generation capacity.

The current absence of an overarching national policy to guide the closure and replacement of coal-fired plants means states and territories must manage changes needed to properly coordinate energy generation, transmission, storage and investment.

Without national coordination, renewable energy generation and storage projects may not come online within planned timeframes, which could delay bringing clean energy into the grid.

Responses

The NSW Government continues to implement policies to encourage energy efficiency and use of renewable energy, such as the Net Zero Plan Stage 1: 2020-2030 released in March 2020, and the Energy Security Safeguard that supports energy efficiency and reduction in demand at peak times. A range of clean energy initiatives is being delivered, such as the Emerging Energy Program to encourage investment in new generation technology and the Solar for Low Income Households program.

On 9 November 2020, the NSW Government released the Electricity Infrastructure Roadmap – a plan to transition the NSW electricity sector into one that is cheaper, cleaner and more reliable. The Roadmap is enabled by the Electricity Infrastructure Investment Act 2020 and builds on the foundations of the 2019 Electricity Strategy and 2018 Transmission Infrastructure Strategy.

The roadmap will:

• deliver five Renewable Energy Zones (REZs) in Central-West Orana, New England, South West, Hunter-Central Coast and Illawarra regions
• attract up to $32 billion of private investment in regional energy infrastructure by 2030
• support the private sector to bring 12 gigawatts of renewable energy and 2 gigawatts of storage, such as pumped hydrogen online
• help NSW deliver on its ambitions to reach net zero emissions by 2050
• reduce NSW electricity emissions by 90 million tonnes by 2030.

The NSW Government released the Electric Vehicle (EV) Strategy in June 2021, to help increase EV sales to more than 50% of new car sales by 2030–31 and help NSW achieve net zero emissions by 2050. EVs also present opportunities to increase the proportion of renewable energy used in the transport sector.

The NSW Government’s Hydrogen Strategy, released on 13 October 2021, will provide up to $3 billion in incentives to develop the NSW green hydrogen industry, including:

• investing $70 million in hydrogen hubs in the Illawarra and Hunter regions
• providing exemptions from electricity network and government scheme charges
• expanding the scope of the Energy Security Safeguard to include hydrogen
• rolling out hydrogen refuelling stations.

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NSW accounts for around a quarter of Australia’s total energy consumption, backed up by large reserves of black coal and natural gas and significant wind, solar and hydro resources.

Coal and gas-fired power stations, combined with the petrol, diesel, gas and other fossil fuels used in the transport and industrial sectors, are major contributors to the state’s greenhouse gas emissions. These power sources also impact local and regional air pollution (see , and topics). The first of the state’s ageing coal-fired power generators, Liddell power station, is due to retire in 2023.

The NSW Electricity Infrastructure Roadmap () will see the state through the transition from fossil fuels by ensuring that new generation and transmission capacity is commissioned before each coal-fired plant retires. This new generation will be a mix of large-scale wind and solar power plus storage capacity, connected by new transmission infrastructure.

The electricity generation mix will also include distributed energy technologies like rooftop solar and household batteries. Over the years, NSW has experienced a sustained uptake in rooftop solar systems and is forecast to have a capacity of at least five gigawatts installed by 2030 and 7.5 GW by 2040.

Renewable Energy Zones (REZs) are modern-day power stations. They combine renewable energy generation such as wind and solar, storage capacity such as batteries and high-voltage poles and wires to deliver energy to homes, businesses and industries. By connecting multiple generators and storage in the same location, REZs capitalise on economies of scale to deliver cheap, reliable and clean electricity and address barriers that may prevent investment in energy networks.

REZs are a key component of the NSW Electricity Infrastructure Roadmap () under which the NSW Government will deliver five such renewable energy zones in the State’s Central-West Orana, New England, South-West, Illawarra and Hunter-Central Coast regions. The proposed REZs will support the Roadmap’s aim to reduce NSW carbon emissions by 90 million tonnes by 2030, as well as:

• delivering improved planning outcomes for local communities by enabling the active coordination of investment in energy generation, storage and network infrastructure
• establishing and contributing to schemes that share the benefits accrued in local communities
• unlocking significant investment and employment opportunities for regional NSW – for example the Central-West Orana, New England and South-West REZs will alone support an estimated $20.7 billion of private investment up to 2030, while the first REZ in Central-West Orana is expected to generate around 3,900 construction jobs at its peak.

Map 3.1 shows the indicative locations of the Central-West Orana, New England and South-West REZs. The Hunter-Central Coast and Illawarra REZ are in the early stages of planning and indicative locations are under development.

The Energy Corporation of NSW has been re-established to lead the delivery of the NSW REZs. The corporation will coordinate the development of transmission, generation and storage projects to deliver efficient, timely and orderly investment.

Building and maintaining social licence throughout regional communities will be paramount to the success of NSW REZs. The Energy Corporation will take a holistic view of REZ planning and consultation. It will work directly with communities to ensure the economic benefits of REZs are equitably shared across the regions; maximise opportunities for long-term regional development; and make sure REZs achieve a balance between electricity, agriculture, heritage, visual amenity, mining and other land uses.

The 3,000-megawatt Central-West Orana REZ is the first to be developed, with a targeted shovel-ready date of end 2022. Since the Roadmap was released and the passage of the enabling Electricity Infrastructure Investment Act 2020, the NSW Government has greatly accelerated the pace of work and achieved some significant milestones, including:

• declaration of the Central-West Orana REZ Transmission as Critical State Significant Infrastructure in December 2020
• publishing a transmission study corridor in December 2020 followed by on-the-ground consultation from February 2021
• release of the Central-West Orana REZ Access Scheme Issues Paper () for public consultation in March 2021.

'Final energy’ is the energy supplied to end users. Final energy consumption includes secondary energy, such as electricity, and therefore excludes the coal and gas used to generate electricity.

Total NSW and ACT energy consumption has generally trended downward over the last decade with slight fluctuations. Energy consumption decreased by around 2% from 1,169 petajoules (PJ) in 2009–10, to 1,142 PJ in 2018–19. Total energy consumption in NSW and the ACT was as low as 1,125 PJ in 2015–16. Figure 3.1 shows the sectoral trends in final energy consumed for the NSW and ACT economies.

Overall energy consumption has remained stable over the last three years with little change in sectoral demands. There was a noticeable decline in industrial energy consumption following the closure of the Kurnell and Clyde petroleum refineries in October 2014, but few major changes since then.

The transport sector continues to be the highest energy user (47% of the total), compared to the industrial sector (33%), residential sector (11%) and commercial sector (9%) in 2018-19. Transport’s share of energy use has continued to steadily increase: its share was 43% a decade ago (2009–10).

Figure 3.2 shows final energy consumption by sector and fuel type (petroleum, electricity, gas, coal and renewable fuels) in NSW and the ACT in 2018–19.

Petroleum was the largest component of final energy used at around 58%. The transport sector was the major user of petroleum in 2018–19 (525 PJ), followed by the industrial sector (120 PJ).

Electricity use remained close to 18% of final energy used. Total electricity use has increased slightly (207 PJ in 2018–19 versus 204 PJ in 2015–16), which may largely be a function of population growth.

Renewable energy use in final consumption increased from 37 PJ in 2015–16 to about 76 PJ in 2018–19 due to the rapid expansion of solar PV as well as wind energy. This category predominantly represents the use of biomass (organic matter), solar and hydroelectric energy.

Coal use accounted for around 8% of final consumption in 2018–19, and natural gas almost 10% (excluding coal and gas used for electricity generation). The industrial sector is the sole user of coal (other than for electricity generation) and it is used to generate heat as part of the manufacturing process. The industrial sector is also the largest user of gas, mostly as a raw material input. Total coal use declined from 126 PJ in 2015–16 to 87 PJ in 2018–19, while total use of gas decreased slightly to 112 PJ in 2018–19 from 114 PJ in 2015–16.

Over the past decade, the population of NSW increased by over 13% or around a million people. Over the same period, per capita energy consumption fell about 14%. In the last three years, NSW and ACT energy consumption per capita has declined by around 3%.

The NSW Energy Savings Scheme and other policies have improved energy efficiency in many areas, which would have contributed to this reduction.

NSW is largely self-sufficient in relation to electricity supply, meeting most of its local demand through state generation. The remaining electricity is purchased from other states (particularly Victoria and Queensland) through the National Electricity Market. Electricity imports enable NSW to manage its supply at the lowest cost to consumers.

In 2019–20, renewable energy sources provided around 19% of the state’s total electricity generation, which is more than four times that provided in 2008–09 (see Figure 3.3). This does not include energy supplied by solar hot water heating, which provided an estimated supply of around 4.4 PJ in 2019–20, equivalent to 1,222 gigawatt-hours (GWh).

Since 2009–10, wind generation has increased more than ten-fold from 433 GWh to 4,574 GWh in 2019–20. Over the same period, generation from solar PV increased from 119 to 5,502 GWh, reflecting the rapid rise in rooftop capacity and the development of at least 15 solar farms. For the first time, combined wind and solar generation exceeded 10,000 GWh in 2019–20.

Bioenergy generation has remained nearly unchanged since the last report, with 1,104 GWh of electricity generated from bagasse (sugar cane waste), landfill and other bioenergy sources in 2019–20 versus the 1,103 GWh generated in 2016–17.

Demand for electricity from the NSW grid is forecast to decline slightly over the next five or more years, before increasing again (Figure 3.4). Demand resulting from population growth is expected to be offset by improvements in the energy efficiency of appliances and machinery. Increasing adoption of rooftop solar and battery storage systems will further reduce residential demand from the electricity grid. Beyond the next five years, consumption is forecast to increase as electric vehicle charging and broader electrification begins to have a notable effect on electricity demand.

Transport is the second largest source of emissions, especially from vehicles, which are a major source of air pollution, particularly in urban areas. Standards for fuel efficiency of vehicles is the responsibility of the Commonwealth Government. As noted in the topic, the demand for transport has increased as the population grows.

Most vehicles in NSW are fuelled by either petrol or diesel. State targets aim for 6% of the total volume of petrol sold in NSW to be from ethanol and 2% of diesel from biodiesel.

The increasing cost-efficiency and take-up of electric vehicles (EVs) presents opportunities to improve the proportion of renewable energy used by the transport sector. EVs’ share of new Australian passenger vehicle sales is forecast to rise to 6 per cent by 2025, 28 per cent by 2030, and 60 per cent by 2040. By this time the EV consumption of electricity from the grid is forecast to grow at more than 1 Terawatt hour per year.

Stationary energy (which includes coal- and gas-fired power stations, petroleum refining and combustion of fossil fuels in manufacturing) is the main source of greenhouse gases in NSW, accounting for 49% of overall emissions. Coal and gas-fired power stations alone account for 37% of emissions (see , and topics). Greenhouse gases contribute to climate change which will lead to higher temperatures, changing rainfall patterns, warming ocean temperatures, rising sea levels and more frequent extreme weather events.

Climate change also places an upward pressure on energy demand. Increased climate variability and extremes may increase demand for heating and cooling and accelerate the need to replace infrastructure, power and manufacturing plants and other buildings to accommodate greater weather variability and extreme events (). Climate variability will also increase the amount of electricity lost during transmission and distribution, while extreme weather events present risks for energy security.

The NSW Government’s priority is to ensure energy consumers have access to affordable, reliable and sustainable energy. The NSW Government is committed to the objective of achieving net zero emissions by 2050 and to helping the state to become more resilient to a changing climate. Emissions in NSW are declining but there is more work to be done. The extent of greenhouse gas emissions in NSW is more fully explored in the topic.

NSW is acting on climate change through the NSW Climate Change Fund and a suite of policies promoting energy efficiency and the transition to a clean energy future.

NSW Climate Change Policy Framework

The NSW Climate Change Policy Framework () sets two objectives for the state: to achieve net zero emissions by 2050 and to be more resilient to a changing climate. In the framework, the NSW Government endorses the 2015 Paris Climate Change Agreement and commits to helping Australia meet its obligations under the treaty. It identifies boosting energy productivity as a key NSW policy direction that will assist in reducing greenhouse gas emissions and put downward pressure on household and business energy bills.

Net Zero Plan Stage 1

Released in March 2020, Net Zero Plan Stage 1: 2020–2030 () is the foundation for NSW action on climate change and the goal to reach net zero emissions by 2050. As per September 2021 announcement, stage 1 aims to deliver a 50% reduction in NSW emissions by 2030 compared to 2005 levels. The Net Zero Plan is supported by the NSW Electricity Infrastructure Roadmap (), which sets a path for reducing electricity sector carbon emissions by 90 million tonnes by 2030.

Diversifying energy supply

The NSW Electricity Infrastructure Roadmap () enabled by the Electricity Infrastructure Investment Act 2020 plans to establish five renewable energy zones (REZs) which will combine renewable energy generation from multiple sources (such as wind, solar, storage) thus capitalising on economies of scale and delivering cheap, reliable and clean energy to NSW. The roadmap will also support projects outside these REZ geographic areas.

Increasing energy efficiency

Greenhouse and energy minimum standards

Established under the Commonwealth Greenhouse and Energy Minimum Standards Act 2012, this program creates a national framework for product energy efficiency in Australia. A number of legal Greenhouse and Energy Minimum Standards determinations prevent the import of poorly performing electrical appliances and provide consumers with information to help them choose more efficient appliances at the point of sale. Nationally, the program is expected to save households and businesses an estimated $60 billion between 2012 and 2030.

NSW Energy Savings Scheme

The NSW Energy Savings Scheme (ESS) is a state wide program designed to improve energy efficiency. Established in 2009, the ESS creates financial incentives for businesses and households to improve their energy efficiency (which involve energy retailers purchasing energy savings certificates from accredited energy efficiency service providers to meet their yearly required energy savings target). Energy savings are achieved by installing, improving, or replacing energy savings equipment.

Activities implemented under the scheme between 2009 and 2019 will deliver energy saving of 32,500 gigawatt-hours (GWh) and bill savings of $6.1 billion by 2029.

ESS has been extended to 2050 and will be expanded under the Energy Security Safeguard which, from 2022 will also support activities that reduce demand at peak times, including flexible demand response.

NSW Climate Change Fund

Established in 2007 under the Energy and Utilities Administration Act 1987, the NSW Climate Change Fund provides funding to reduce greenhouse gas emissions and the impacts of climate change associated with water and energy activities. Funding is provided under energy efficiency, renewable energy and climate change adaptation programs.

Government Resource Efficiency Policy

The NSW Government Resource Efficiency Policy (GREP) – released in 2014 and updated in 2019 – commits the NSW Government to lead by example by implementing energy efficiency projects and adopting renewable energy across government facilities. This includes a target to accelerate the rollout of solar panels on government buildings, such as schools and hospitals. Net Zero Plan Stage 1 increased this target to 126,000 megawatt-hours a year by 2024. The NSW Government is also offering its rooftops and other spaces for third parties to install solar PV systems.

BASIX

In July 2017, the NSW Government increased Building Sustainability Index (BASIX) energy targets for residential developments. The updated targets aimed to improve the energy performance of new houses by 10% and multi-unit dwellings by 5%. The new targets are expected to contribute an additional 12 GWh of annual energy savings per year by 2020.

National Construction Code

The National Construction Code (NCC) is a uniform set of technical guidelines for the design, construction and performance of buildings throughout Australia and includes the Building Code of Australia (BCA) and the Plumbing Code of Australia. The BCA sets out minimum performance standards for buildings, including energy efficiency. The BCA is referenced and given effect in NSW through the Environmental Planning and Assessment Act 1979. The NSW Government is a member of the Australian Building Codes Board which oversees the NCC. The board is considering ways to increase the stringency of energy efficiency requirements for commercial buildings.

NABERS

The NSW Government’s National Australian Built Environment Rating System (NABERS) rates the environmental performance of Australian buildings, including energy efficiency, using a six-star scale. Buildings participating in NABERS have reduced their energy consumption at some of the fastest rates in the world, saving over $1 billion in energy bills since the rating system was introduced.

Supporting renewable energy uptake

The NSW Government is currently delivering a range of clean energy initiatives to help communities, the private sector and the government sector develop and accelerate clean energy technology while also enhancing grid security and bill affordability. They include the following:

• The Emerging Energy Program is a $55-million initiative to encourage private sector investment in new generation technology.
• Regional Community Energy is helping to improve the reliability and affordability of energy for regional NSW communities with funding of $30 million.
• Solar for Low Income Households is a $65-million scheme to help people on low incomes reduce their electricity bills by installing a three-kilowatt solar system in their home.
• The Empowering Homes pilot is providing access to no-interest loans for eligible households in selected NSW local government areas to purchase solar-battery systems for their homes.
• The Smart Batteries for Key Government Buildings is supporting installation of smart batteries at key government sites to optimise the benefits of installed rooftop solar systems, reducing electricity costs for government and deepening understanding on the benefits of solar-battery solutions.

NSW also manages the National GreenPower Accreditation Program, which helps to drive investment in new solar and wind plants by enabling households and businesses to purchase renewable energy over and above mandated targets. Since 2005, GreenPower customers have achieved over 19 million megatonnes in emission reductions. In 2019, over 160,000 customers purchased 506 GWh of GreenPower.

Diversifying energy supply

Pumped Hydro Roadmap

The NSW Government is working with the private sector to develop renewable energy and storage projects on state-owned dams as part of its Pumped Hydro Roadmap. The Roadmap includes work with WaterNSW to run a competitive process for private sector generation and storage proposals.

Renewable Energy and Storage Program

WaterNSW has sought market interest under this program in the use of dam and land assets for renewable energy, especially dispatchable forms such as pumped hydro. Twenty-two projects with a total capacity of around 7,000 megawatts were shortlisted as part of this process, most of them pumped hydro schemes. WaterNSW is in ongoing discussions and negotiations with project proponents after receiving detailed proposals in late 2019.

Coal Innovation NSW Fund

The Coal Innovation NSW Fund supports the research, development and demonstration of low-emission coal technologies. The fund has invested directly in a broad range of initiatives supporting these technologies, including the Delta Carbon Capture and Storage Demonstration Project and the NSW CO₂ Storage Assessment Project.

Supporting energy efficiency and demand management

Energy Affordability and Energy Efficiency Packages

This NSW Government package supports low-income households in social and private housing to save energy by:

• helping eligible households replace their inefficient fridges and televisions with new efficient appliances at a discounted price
• upgrades to over 20,000 rental homes enabling low-income tenants to benefit from energy-efficient lighting, heating and hot water systems
• partnering with social housing providers to install energy efficiency measures in social housing properties.

Information on accessing NSW Government energy affordability or efficiency programs can be found on Energy Saver.

Household and Small Business Upgrades Program

Households and small businesses are being encouraged to save energy and money under this program which offers discounts on lighting upgrades and energy-efficient appliances. Part of the Energy Affordability Package announced in September 2017, the program is delivered through contracted suppliers to increase its reach.

Manufacturing Efficiency Funding Program

This program provided funding assistance in 2019–20 to around 250 manufacturing businesses to install energy-efficient equipment. The upgrades to items such as boilers, refrigeration and metering technologies aimed to help businesses better manage their energy use.

Energy Management Services

Since December 2017, Energy Management Services has provided support for small businesses to understand the basics of managing their energy use. Initially, this included free online modules, webinars and tools and guidance.

From November 2018, services were extended to include blended learning, training, coaching and technical support to businesses of any size to reduce their energy use.

In 2019, eligible businesses in target sectors were given access to specific energy management support, including co-funding towards energy management diagnostics, opportunity analysis, sub-metering and technical support.

Current courses for small businesses can be found on Energy Saver. Funding is by way of the Energy Affordability and Energy Efficiency Packages.

The NSW Government is also looking at the implications of longer-term energy trends and is positioning NSW to take advantage of these opportunities.

Digital meters

In December 2017, the Australian Energy Market Commission (AEMC) introduced a National Electricity Rule requiring all new electricity meters to be digital. Digital meters can help to improve the affordability and reliability of electricity supplies. They also allow consumers to access new services from their retailers, including improved energy use data, visual displays of usage, quick detection of faults and safety issues and easier integration of solar and battery technologies. The NSW Government supports the industry-led rollout of digital meters.

Electric vehicles

The NSW Future Energy Strategy and Future Energy Action Plan 2020–2025 (TfNSW 2020a, 2020b) outline the commitment of Transport for NSW to secure energy needs from sustainable sources and support the transport sector’s transition to net zero emissions by 2050. In June 2021 the NSW Government released the Electric Vehicle (EV) Strategy to support the increased uptake of EVs. It will do this by implementing a range of incentives such as rebates, removing stamp duty for EVs, targets for NSW Government fleet and incentives for council and private fleets and major investment to ensure widespread EV charging coverage.

The Action Plan also contains a range of initiatives aimed at improving transport’s operational energy efficiency using a smart technology corridors program to ease Sydney’s congestion as well as an intelligent congestion management program.

Hydrogen buses

Transport for NSW is supporting trials into the use of hydrogen-powered buses to demonstrate the fuel’s potential as a low-emission technology for medium and heavy vehicles and freight.

Pumped hydro storage

New pumped hydro storage projects can help ensure that energy supply, security and reliability remain adequate for NSW’s future needs. The Government is supporting private sector investment in complementary pumped hydro projects through actions such as WaterNSW’s Renewable Energy and Storage Program and the $50 million Pumped Hydro Recoverable Grants Program.

Pumped Hydro Recoverable Grants Program

Under the NSW Electricity Infrastructure Roadmap the NSW Government will establish the $50 million Pumped Hydro Recoverable Grants program to support the commercialisation of pumped hydro projects in NSW. The program will run a single stage application process for recoverable grants to establish a pipeline of up to 3 gigawatts of shovel ready pumped hydro projects. The grants will help the private sector meet the significant upfront costs of establishing the feasibility of pumped hydro projects and support projects that otherwise may not be advanced enough to compete for Long Term Energy Services Agreements for long duration storage.

Hydrogen Strategy

In October 2021 the NSW Government released its Hydrogen Strategy. The Strategy will provide up to $3 billion in incentives for the development of the NSW green hydrogen industry, including investing $70 million in hydrogen hubs in the Illawarra and Hunter regions, exemptions from electricity network and government scheme charges, a hydrogen expansion to the Energy Security Safeguard and rolling out hydrogen refuelling stations. The policies set out in this Strategy are estimated to support industry to reduce the cost of hydrogen by up to $5.80 per kg and enable the delivery of 2030 stretch targets of 110,000 tonnes annual production, 700 MW electrolyser capacity and hydrogen cost below $2.80 per kg.

Green hydrogen can help drive deep decarbonisation in the ‘hard to abate’ market segments within the transport, industrial and energy sectors which account for around 24 mega tonnes (or 18%) of NSW’s annual emissions and could attract over $80 billion of investment in NSW by 2050.