Implications of the change of government in New South Wales

On 25 March New South Wales (NSW) elected Chris Minns as their new Premier signalling a change in direction for Australia’s most populous state. This will see some change in policy particularly for the energy and resources sector. 

For the coal industry, there are eight proposed coal expansions on the table that are now in doubt. These include the Hunter Valley Operations Continuation Project. Prior to the election Minns did also indicate that the Labor government may consider acquiring the Eraring coal-fired power plant to ensure energy supply. Eraring is the largest power station in NSW and was earmarked for closure by Origin Energy in 2025. 

In a bid to address climate change, Minns took to the election an intention to legislate NSW’s target to achieve net zero carbon emissions by 2050 and a 50% reduction in carbon emission on 2005 levels by 2030. Labor has also announced that it will establish a Net Zero Commission responsible for developing a plan to achieve net zero carbon emissions by 2050 and monitoring and reviewing the plan every five years. The Net Zero Commission would also review the impact of the targets on jobs, industry, energy prices, ensuring mining communities receive a fair share from royalties and make recommendations to the government on how to meet the targets more effectively. 

Minns also indicated that his government will create the NSW Energy Security Corporation. This body will be charged with accelerating investment in renewable energy assets to deliver cleaner and more reliable energy. The organisation will partner with industry to develop renewable storage solutions like pumped hydro and community batteries to maximise benefits from household solar. It is expected that the Corporation will produce 12 gigawatts of additional renewable energy and 2 gigawatts of storage by 2030.  In addition, Minns has indicated that the government will establish a Hydrogen Centre for Excellence that should be operational by 2026. 

The government has already opened a competitive tender for electricity firming infrastructure under the Electricity Infrastructure Investment Act. The tender has an indicative capacity of at least 380 megawatts of additional firming infrastructure in the Sydney-Newcastle-Wollongong sub-region that will be available by the end of 2025. The intention of the tender is to improve the reliability of the state’s energy system. 

Other changes that may soon occur include streamlining the process for approving renewables projects to give industry more certainty. Another potential option is to increase coal royalties, currently at 8.2% for open-cut mines in NSW. However Minns has indicated that his government doesn’t have any plans to increase royalties at this time. 

This space will be one to watch closely as the need to address climate change and increasing cost of living continue.