Australia: Renewable energy policies in the NSW election - more heat than light?

Last Updated: 23 March 2011
Article by Daniel Solomon


With the upcoming election in NSW, both Parties are talking rebates to shelter the consumer from the effects of rising electricity prices. It is arguable that these measures only assist in dealing with rising energy costs in the short term. What however is each party saying about the long term energy future of NSW?

The AEMO Electricity Statement of Opportunities 2010 forecasts that by 2017 / 2018, on the basis of low economic growth, NSW will require substantial investment in generation or demand side management. One avenue may be to enhance the regulatory environment in NSW for investment in Renewable Energy.

Initial reforms in the National Electricity Market (NEM) are taking place to facilitate investment in renewable energy in NSW.

One such reform has been the introduction of semi-dispatched forecasting into the NEM, which allows for intermittent forms of renewable energy generation, such as wind energy, to be more readily fed into the grid. Another reform to the NEM currently being considered is the introduction of Scale Efficient Network Extensions, designed to accommodate the clusters of renewable energy installations likely to be introduced into the grid in the short to medium term.

With the upcoming NSW State election the following represents an overview of the major parties' respective election policies on Renewable Energy:

Labor Party

Fairness for Families Policy

  • Offset to the Solar Bonus Scheme: The policy seeks to offset the cost of the Solar Bonus Scheme to household energy bills resulting in estimated household savings of greater than $100 next year and $1,000 over the life of the plan.
  • Energy Rebate: The policy will increase the NSW Energy Rebate to $250 per year. This will be available to all households with a combined income of less than $150,000 per year.

Liberal Party

Renewable Energy Buy-Back Scheme

  • Proposes the introduction of a Gross Feed in Tariff for households, institutions and businesses. It is contemplated that this scheme will also apply to commercial installations.

Plan for an Affordable and Sustainable Energy Industry

  • 2011 Tax Summit Position: The plan proposes that the Federal Government should offset any rises in household electricity bills resulting from any Federal Government carbon tax.
  • NSW Climate Change Fund: The plan proposes to redirect funds to "cover the cost of Labor's failed Solar Bonus Scheme".
  • Solar Summit: The plan seeks to establish a sustainable future for the NSW Solar Industry.
  • Parliamentary Secretary for Renewable Energy: The plan proposes that the Parliamentary Secretary will be in charge of developing a 2020 NSW Renewable Energy Plan to meet a 20% Renewable Energy Target (RET) by 2020.
  • Poles and Wires: The plan proposes that the NSW Government retain public ownership of poles and wires.
  • Special Commission: The plan proposes a Special Commission of Inquiry into the NSW Electricity Sale.
  • Waste Management: The plan seeks to cut waste and mismanagement by merging three distributors into a metropolitan and regional distribution network, which is estimated to deliver $400 million in savings over 4 years. The funds from this are intended to be passed to end consumers through rebates (see below).
  • Rebates: Low Income Household Rebate of $235 for low income households and a Family Energy Rebate of $150. Those eligible for both rebates receive a maximum of $250.
  • Dividend Policy: The plan seeks to cap dividends from electricity companies at forecast levels.

Some commentary has suggested that the policy positions outlined by both the Labor and the Liberal parties in the lead up to the NSW State election do not give enough detail on how NSW will manage its energy requirements in the medium to long term. The present uncertainty is a concern for players in the NSW energy sector, especially given the importance of regulatory certainty for any private investment in the sector. For private investment in renewable energy in NSW to grow, participants are asking for more details on the long term energy strategy for NSW.

For information on the current NSW policies relating to Renewable Energy, please see the table below.

Current NSW Renewable Energy and Sustainability Policies

Name Nature Limitations End Date
Solar Bonus Scheme 20˘/kWh Gross FiT

capped at 300 MW

limited to customers with annual electricity consumption of less than 160 megawatt hours

one solar PV connection limited to up to 10 kW in capacity

Commercial Scale Renewable Energy Working Group group established to investigate opportunities for installing mid scale solar systems as an alternative to network expansion N/A N/A
NSW Home Saver Rebates

rainwater tank rebate

hot water system rebate

hot water circular rebate

dual flush toilet rebate

capped at $1,500.00 per household N/A
Energy Efficiency for Small Business Program

subsidised energy assessment and tailored energy action plan

50% off installation costs up to $5,000 (for businesses using $5,000-$20,000 a year in electricity) and up to $2,000 (for businesses using less than $5,000 a year in electricity)

co-ordination assistance by an assessor to install energy saving improvements, at no cost to the business (up to four hours).

businesses that use up to approximately $20,000 in electricity a year or have up to about 10 full-time employees

the subsidy is for implementing energy efficiency improvements as outlined in the Energy Action Plan and is limited to items with a payback period of greater than 2 years

Energy Saver - energy efficiency for medium to large organisations

DECCW provides subsidised energy audits and facilitation to help NSW businesses identify and implement energy savings

an extra $20 million will allow DECCW to work with an additional 800 medium to large organisations on leading-edge waste, water and energy saving measures

  June 2010
Community Savers Projects funding of up to $40,000 for not-for-profit community organisations to undertake simple, low-cost water and energy saving upgrades in the facilities they use

only not for profit organizations can apply

must be legally constituted entities

Central Coast Water Savings Fund

the aim of the Fund is to stimulate investment in innovative water conservation and recycling technologies and practices, and improve water efficiency across all sectors

the Fund provides up to $2 million a year for saving water in the Central Coast region

  Round 5 applications closed on Thursday 17 February 2011

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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