Cost hikes and delays for NSW renewable energy zones

·3-min read
Dan Himbrechts/AAP PHOTOS

Plans to transform the NSW energy system and replace coal-fired power are proving to be more costly and will take longer than initially thought.

Energy Minister Penny Sharpe briefed journalists about Labor's network infrastructure strategy, saying she was concerned that costs and time frames had grown since the project was proposed in 2020.

"I want to be very upfront about this, there's some real challenges within this plan," she told reporters on Thursday.

"The previous government was asked about costs and time frames and never provided an answer."

The network infrastructure strategy is the first time any detailed costings have been made and estimate the total cost to come in just under $10 billion.

"It's not a small amount of money," she said.

Ms Sharpe said Labor had some "back of the envelope" numbers in 2020 about how long projects would take and how much they would cost.

"So the increase has been substantial and I am concerned about that," she said.

The NSW government's goal is 50 per cent renewable energy by 2030 and as close as possible to 100 per cent by 2050.

The renewable energy road map, drawn up by the previous government, had been made more difficult by the "addiction to privatisation" in the energy sector and time frames that did not include the need to consult local communities, Ms Sharpe said.

Clean Energy Council chief executive Kane Thornton said delays in transmission development were driving up power prices and hindering progress on net-zero emissions.

"These delays mean that right now, there is a greater reliance on unreliable fossil fuel generation and therefore higher costs than necessary," he said.

Ms Sharpe said two renewable energy zones that account for the bulk of the new generation capacity will be delayed by up to two years.

The central west Orana zone, covering almost 21,000 square kilometres with a network capacity of 4.5 gigawatts for new wind and solar projects at a cost of $3.2 billion, will not hit its "energisation date" until 2027-28, compared with an initial 2025 target.

The New England zone, covering almost 15,500sq km with a network capacity of 2.4GW and at a cost $4.2 billion, will now start in 2029 - two years behind the initial 2027 goal.

An independent check of NSW energy policies will be done by specialist Cameron O'Reilly and an expert panel, who will "stress-test" electricity supply and reliability under the plans.

The review will make recommendations about removing barriers and getting infrastructure under way.

A report has a deadline of early August and will be made public.

"Building a clean energy transition of such scale isn't easy, but clear and deliberate planning, like that released by Minister Sharpe today, is a critical piece of the roadmap," Mr Thornton said.

The coalition government had committed $1.2 billion for critical energy infrastructure, renewable energy zones, driving private investment in renewables, upgrading the transmission network and encouraging energy storage.

The 10-year investment was to cover the initial planning and development stages until construction began by private operators who would then pass on costs to consumers.