Australia’s NSW Energy Plan May Lift Metals Demand
The NSW government unveiled a long-term energy plan that targets the construction of 12,000MW of new renewable energy capacity by 2030, the NSW energy minister Matt Kean said.
The new electricity infrastructure plan in Australia’s most populous state and largest power-consuming market is part of the state’s long-term plan to have net zero greenhouse gas emissions by 2050, which is consistent with other Australian states but not with the Australian federal government. Canberra has no long-term net zero emissions target and contrasts with its major trading partners China, Japan and South Korea, which have all recently committed to going carbon neutral within the next 30-40 years.
As more countries across the world embark on plans to build a sustainable, low-carbon economy, demand for certain high-temperature and battery metals like molybdenum, cobalt and vanadium used in gas turbines and battery storage units pick up pace.
The 20-year plan follows the release of a transmission infrastructure strategy by the NSW government, which pointed to the need for three new renewable energy zones to be established across the state. This includes developments in the central-west, New England and southwest regions of the state.
The plan, while including gas, does not put the fuel as the centrepiece of its energy plan, which is also seen as an economic plan and was released a day ahead of the state’s budget for the 2020-21 fiscal year to 30 June. In September, the conservative coalition federal government unveiled a gas-led economic plan.
The inclusion of on-demand gas power generation comes as NSW sees many of its black-coal power plants reaching the end of their design life over the next 15 years. The first of the plants earmarked to close in NSW is the 1,680MW Liddell power station owned and operated by Australian utility AGL Energy, which plans to fully close by 2023. NSW consumed around 27mn t of thermal coal in the 2018-19 fiscal year to 30 June, nearly all of which was used for power generation.
AGL plans to replace Liddell with a 250MW gas-fired power plant near Newcastle in NSW and the installation of a battery storage facility on the Liddell site.
Gas peaking plants can provide stability because they can sit at a low level or even be off line during low-demand periods, and rapidly ramp up to meet evening demand, the NSW government said in its electricity infrastructure roadmap. Fast-peaking plants could also be provided by hydrogen generators, it said.
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