Press conference with NSW Minister for Climate Change and Energy Penny Sharpe, Sydney

PENNY SHARPE: Well, thanks everyone for being here on the roof at New South Wales Parliament House. I’ve been 18 years and this is the first time I’ve been on the roof. I’m really excited to be here today with Chris Bowen, the Federal Minister for Climate Change and Energy, to make this announcement about one gigawatt of firming technology, which is batteries and virtual power plants that are coming to New South Wales.

It is a really important announcement that shows the cooperation that can happen between New South Wales and the Federal Government when we want it to work and how we can actually deal with the transition and the exciting transition to renewable energy in New South Wales and across Australia, but I might hand over to Chris and then I’ll have a little bit more to say.

CHRIS BOWEN: Well, thanks very much, Penny. It’s great to be here with such an important colleague and a key partner as Penny Sharpe. This transition will only work if all governments across Australia are working hand in glove, and that’s exactly what the Albanese government and the Minns government are doing.

And today, Penny and I are making an important announcement about the support, as Penny said, for more than a gigawatt of dispatchable energy that’s being rolled out in a joint program between the New South Wales Government’s LTESA and the Commonwealth government’s Capacity Investment Scheme.

Now, in July, Minister Sharpe and I announced that we would seek to support around 900 megawatts of new power and today we’re pleased to announce that we’ve done better than that, that the auction results have led to more than a gigawatt of dispatchable energy to be supported across New South Wales.

Now, a gigawatt is a lot of energy. It’s around eight per cent of New South Wales’ peak demand. And we’re very pleased that this rollout of renewable energy dispatchable energy, supporting renewable energy, will see New South Wales supported through this energy transition and, in particular, we’re announcing successful projects, which include the renewable energy zone battery in the Orana zone located in Wellington, which will have 415 megawatts of capacity; AGL’s Liddell battery, very important. And this really shows the transition we’re talking about, taking the Liddell site and turning it into a site to store renewable energy, which is a very substantial battery, 500 megawatts of capacity, with two hours’ storage. We’ve also got a new solar battery in Smithfield, which also happens to be my home up to where I live and grew up, still live today. So, I’m very pleased with that one – 65 megawatts of capacity. And three separate virtual power plants to be delivered through Enel X Australia Demand Response Project, a total of 95 megawatts of capacity.

All these projects will be targeted to be operational by December 2025, so again, as we know, summer peak is an important issue that we’re all managing. We’re managing this summer’s peak and we’ll always have to manage summer peaks. These projects should be available by December 2025, which will help with that summer.

So, just to repeat, Commonwealth and State Governments working hand in glove. We have an important partner in the Minns government, an important partner in Penny Sharpe. I’m very pleased that we’ve been able to take what was originally a much smaller auction and turn it into more than a gigawatt of power for New South Wales. It will be delivered together in the best interests of the people of New South Wales and indeed in a connected grid, the best interests of the people of Australia. Thank you.

PENNY SHARPE: The rollout of this program helps us with one of the most important challenges in the transition and that is dealing with reliability as coal fired power exits the system and we’re getting more renewables in here.

Batteries give us the storage that allows us when we’re in peak demand to be able to get more energy into the grid. They also help us when the wind isn’t blowing and the sun isn’t shining; we’re able to keep that level amount of energy going to households. This is equivalent of being able to power around 430,000 households in New South Wales. This is a big deal. These projects are extremely exciting because they’re going to be able to come on very quickly, by the end of 2025.

For those of you that are asking about virtual power plants, and I know that you are, virtual power plants are also the next generation of what is extremely exciting, which is about harnessing rooftop solar, batteries in people’s homes, EV chargers and being able to manipulate those around the network so that you can deal with the peaks and troughs of energy demand. They are extremely exciting, and so I’m thrilled to see these three projects so we can get them up and running and really show the community how we can link their batteries and their resources into the grid to help us manage it for everyone else.

Finally, I would just like to say we started off at 380 megawatts of a tender and we thought that was big and we thought that was exciting. The fact that we’ve got to over one gig is extremely exciting and can only happen with cooperation. We’ve got a lot more to do. We’ve got more tenders to come. But for us, as we are looking at the reliability challenge – and people would be aware we’ve got some challenges into 27, 28 – this fills an enormous gap in that and it will really, really help us into the future to smooth the transition so that we can get to cheaper renewable energy as quickly as possible, which is what we absolutely must do. Happy to take questions.

JOURNALIST: How far will these projects, along with the Waratah super battery go to filling the reliability gap that AEMO is [indistinct] 2025?

PENNY SHARPE: Look, they are really important and they go someway to that. We still think that there is going to be a reliability gap that we’re going to have to deal with, but this puts a big, big – really fills the big hole there. AEMO will keep doing their modelling in relation to this, but with an extra one gig coming in, the reliability gap will be smaller. We have to keep working with it. Why I’m so excited about these projects is that it means things like Eraring we do not need to be open one day longer than they need and it is these types of projects that will make sure that that happens.

JOURNALIST: To follow up on that, in September you didn’t have any understanding of how long Eraring might have to stay open. Do you have an update on that at this point and do we have a [indistinct] – 

PENNY SHARPE: Sure. Well, people would be aware that we’re having discussions with Origin in relation to the future opening or closure of Eraring. As I’ve said on many occasions, we’re not going to be talking about those publicly but I have been very clear about this: not a day longer, not a cent more of taxpayers’ dollars than is necessary. The types of project we’re announcing today mean that that period is as short as it possibly can. These projects will need to be included in AEMO’s next forecast, which obviously will have a big impact and that’s why today is so exciting.

JOURNALIST: Can you tell us at least if it is weeks, months, years that you are talking about?

PENNY SHARPE: Nice try. You ask me every single time. Look, I like to be transparent around these things. Obviously, people are interested and it is extremely important, but we’re having very important discussions in a privatised system with a commercial entity and part of my job is also to protect the public interest. We’re not going to be negotiating these things openly and through the media.

JOURNALIST: Is the ownership issue with Origin, Minister, causing some delays for you?

PENNY SHARPE: Look, it’s a matter for Origin. People would be aware that they’ve got their meeting tomorrow around the future of their ownership. That’s a matter for them and for their shareholders. We need to deal with whoever is the owner and we’ll continue to do that.

JOURNALIST: How are you going to connect these projects to the grid? How are you going to connect them to the grid? Is this going to be large –

PENNY SHARPE: Some of them can go straight into the grid. So, Liddell at AGL, the big battery there can go straight in. This is partly why these projects can be commercially viable and operating by 2025. They don’t rely on those very big transmission projects that we’re working with. That’s why they’re so important and that’s why they actually really help us with that reliability gap.

JOURNALIST: Minister, you said at the start of the week you were open to amending the [indistinct] legislation. Can you give us an idea of how the debate on that bill is going and what sorts of amendments you are open to?

PENNY SHARPE: Look, last night was really good. The bill has passed its first stages with everybody except the conservative crossbench supporting that. So, I was pleased to see the support from the Greens and the Opposition, including the Liberals and the National Party. We’re having discussions about amendments, as we would do, and they’ll continue. Debate will continue this week and probably into next week. I’d hope to have it passed by Tuesday next week.

JOURNALIST: Are you supportive of legislating a 2035 target the Coalition are going to put forward?

PENNY SHARPE: We’re talking about all of the amendments and, as I said, we’re talking to all of the crossbenchers about that. As I’ve also said I’m not going to be telegraphing the negotiations with the crossbench through the media.

JOURNALIST: Minister, one more on Eraring. Are you saying that you’re never going to publicly say, you know, how long it’s got left and we’re just going to find out one day that you’re going saying Eraring is closed?

PENNY SHARPE: That’s absolutely what I am not saying. What I’m saying is when I can tell you, I’ll tell you.

JOURNALIST: Minister Bowen, on the 2035 target, I think Australia needs to sign up to a 2035 target in a few years. Is it easier if New South Wales has a 2035 target in legislation?

CHRIS BOWEN: We are obliged to notify the UNFCCC of Australia’s 2035 target by February 2025 and, of course, I’ve begun the process of that work. I’ve asked the Climate Change Authority for advice and I’ve begun the work on sectorial plans which will build to informing the 2035 target which the Federal Cabinet will decide on my recommendation. One of the things we factor in is the progress of states and we’re seeing a lot of progress from states and no state more than New South Wales. So, we factor in all state policies. But a target in itself is important. But what’s even more important is policies underpinning efforts and that’s what we’re talking about today. So, even more important are the sorts of policies we’re announcing today, which show real progress towards the 2030 target and will assist in us determining our 2035 target.

JOURNALIST: Penny, you’ve spoken about solar rooftops and how they can be embedded into the grid. Does that mean that potentially that 2025 when these batteries come online, that could be sort of a reality?

PENNY SHARPE: Virtual power plants are relatively new but they’re already being operated. They’re separate to these big batteries. The batteries that we’re talking about today are these very big ones, long duration, they take up a lot of space. When we talk about virtual power plants, essentially, it’s technology that allows us to connect up a whole lot of solar roofs and people’s batteries and potentially their EV chargers so they can then be orchestrated together, so they can then be moved around the network during the peaks and troughs of demand. They work very closely with, obviously, retailers and with the distributor, but it’s relatively new technology, but it’s really exciting in terms of managing the challenge of renewable energy, which is intermittent, and the peaks and troughs in the day.

As we know, when you wake up in the morning and you turn on your light and you come home and you turn on your air conditioner, that’s when the peaks are. During the day, it’s much lower. What virtual power plants allow us to do through technology is to move that energy around to actually help also stabilise price spikes. They’re a really exciting technology. We are going to see many, many more of them. Let’s get excited here. Australia has got the most solar penetration of any country in the world. We’ve had days where 70 or 80 per cent of the electricity grid, the National Electricity Market, is being powered by solar energy. There’s huge potential there. But there’s also challenges around how that works, how it can fit in. We’ve had challenges when we actually get too much sunlight on a day and not being able to distribute it. Virtual power plants are part of the solution to that.

JOURNALIST: Minister, these tenders you mentioned they will be included in AEMO’s next forecast. Do you expect that will sort of make up for the shortfall we’re expecting in – 

PENNY SHARPE: I think coming into this job I’ve learnt that the modelling of the National Energy Market and everything that’s in there is not a job for a Minister; it’s the job for AEMO. Of course, they’ll take that on board and that’s why it is so important. I mean, AEMO say all the time the best way for us to make the transition is to get renewable energy, dispatchable, firming and storage and transmission all in as quickly as we can. That will factor into their things and I hope we’ll see a real impact in terms of the reliability gap that we’re facing.