NSW Launches Additional Tender for Renewables Capacity Amid Coal Plant Retirements
New South Wales has announced plans to initiate an additional tender for firmed generation capacity. This move aims to address any potential supply deficits arising from the retirement of coal plants and to manage other risks associated with intermittent renewable energy production, such as prolonged periods of low output.
To date, six tenders for Long-Term Energy Service Agreements (LTESAs) and renewable energy zone (REZ) Access Rights have been successfully completed under the NSW Electricity Infrastructure Roadmap. The most recent round, Tender 6, concluded with the announcement of winners earlier this month and has been described as the most extensive and successful battery tender in terms of both scale and the number of projects. This success is attributed to declining technology costs and competitive bids.
Major Projects and Future Goals
Among the victorious projects is the impressive 300 megawatt (MW) Great Western battery facility, set to be developed by Neoen Australia at the site of the now-closed Wallerawang coal-fired power station near Lithgow. All chosen projects are scheduled for completion by 2030, with some boasting more than eight hours of storage capacity to ensure reliability over the 14-year contract period, factoring in potential capacity degradation.
A seventh tender was launched in October, seeking 500 MW of firming capacity. However, on Wednesday, state energy minister Penny Sharpe announced that she has instructed ASL (formerly AEMO Services) to conduct another firming tender aimed at addressing further shortfalls highlighted in the recent 2025 Energy Security Target Monitor report.
Addressing Future Energy Security
The report indicates that New South Wales has adequate firm capacity until a projected shortfall arises in the 2027-28 period, which Tender 7 aims to mitigate. Looking beyond this timeframe, the analysis predicts that sufficient firm capacity will persist until a second deficit is forecasted in 2033-34, coinciding with the scheduled closure of the Bayswater and Vales Point power stations.
Sharpe noted that the forthcoming tender will not only target these emerging challenges but will also enhance overall reliability. This initiative will run in tandem with Tender 7, with ASL currently engaged in additional modelling to define its size and scope.
“The NSW government has been abundantly clear that our number one priority is to deliver secure, reliable and affordable electricity, through a mix of renewable generation, storage and gas as ageing coal-fired power plants come offline,” said Sharpe in a statement.
“The historic battery rollout marks an exciting milestone, but we can’t afford to be complacent. The latest ESTM report shows that while we’ve made significant progress, there’s still more work to be done.
“That’s why we’re establishing a solid pipeline of projects aimed at fulfilling NSW’s future energy requirements, alleviating possible delays, and ensuring cost-effectiveness to ease the financial burden on electricity consumers.”
