8.3 GRID DECARBONISATION

Description

In NSW there are five coal-fired power stations with combined 10,240 MW capacity that supply most of the State’s electricity and make up the majority of electricity sector emissions (Liddell, Vales Point B, Eraring, Bayswater and Mount Piper). The state is largely self-reliant for power, with this supplemented by interstate links as and when required. Since 2010 three coal-fired power stations with 1,744 MW of capacity have closed in NSW (Wallerawang C, Redbank and Munmorah). In recent years the development of large-scale solar and wind energy generation has accelerated in NSW, and battery storage and pumped hydro are beginning to be developed alongside these intermittent generation sources. A total of 11,000 MW of capacity in two Renewable Energy Zones was recently announced for the State’s Central West Orana and New England regions. In addition, rooftop solar installations have accelerated in recent years. As more coal-fired power stations approach the end of their life – announced closures are in 2023, 2028, 2034, 2035 and 2043 respectively for the five active coalfired power stations noted above – they will be replaced with mostly renewable energy. This is most likely to be from large-scale wind and solar PV, together with Distributed Energy Resources (DER) and demand-side measures. Assuming this, the future carbon intensity of the NSW grid will decline, gradually until around 2035, then accelerating towards zero by the mid-2040s. The grid emissions intensity will be influenced by a range of factors, and AEMO’s Integrated System Plan 202024 (ISP2020) models five scenarios with differing assumptions for key influencing factors including demand drivers, DER uptake, emissions, large-scale renewable build cost trajectories, investment and retirement considerations, gas market settings and coal price settings, together with assumptions regarding policy settings and transmission infrastructure development. The resultant scenario outcomes for closure of large-scale generators in the NEM is illustrated below, highlighting the potential for a rapid transition to renewables.

24 AEMO: https://aemo.com.au/en/energy-systems/major-publications/integrated-system-plan-isp/2020integrated-system-plan-isp

Scope for abatement

Risks and mitigation

Costs and benefits

The NSW Government’s Electricity Infrastructure Investment Bill may facilitate an even more rapid transition to renewables in NSW than the AEMO Step Change scenario, and future ISP forecasts will reflect any new scenario modelling.

The above potential change to the NSW grid carbon intensity would have a significant impact on GHG emissions for MidCoast Council, with the potential for more than 28,000 t CO2-e of abatement if electricity supply is nearly all renewable and vehicles have transitioned to electric over time.

Under most of AEMO’s scenarios (excepting Step Change) the majority of this impact would not be seen until the late-2030s and into the 2040s’, and under a Step Change scenario this would still not be seen until the 2030s. Hence, if MidCoast Council wants to see its emissions decline at a faster rate, then significant abatement through energy efficiency, more onsite solar PV and battery storage, and switching to electric vehicles powered with renewables will be required.

A slower change to the carbon intensity of grid electricity could see a slower rate of change in emissions intensity of grid electricity. MidCoast Council has little influence over the rate of change in the grid carbon intensity, and the main risk mitigation strategy is to try and build capacity across MidCoast Council to respond with local solutions to reduce emissions. MidCoast Council could also have a role through its advocacy for change, potentially in collaboration with other Councils and representative organisations.

There is no direct cost to MidCoast Council associated with the decarbonisation of the electricity grid, excepting impacts on energy pricing in future years.