Spanish energy giant Iberdrola targets NSW for expansion despite prolonged delays

Iberdrola has set aside billions to invest in Australia’s energy transition, and the company’s local head says NSW is the most alluring destination for investment, despite approvals for new projects taking years.

Spanish energy giant Iberdrola is targeting NSW for its renewable energy pipeline despite prolonged delays that can see some projects take up to seven years to secure regulatory and environmental approvals, the company’s local chief executive says.

The comments are a boost to the hopes of NSW in completing its energy transition, which is so behind the necessary pace that it was forced to strike an agreement to prolong the running of the state’s largest coal power station.

The extension to Origin Energy’s Eraring coal power station gives NSW at least two years to incentivise sufficient renewable energy sources to allow for the closure, and Ross Rolfe, chief executive of Iberdrola Australia said the company has earmarked the state for substantial portion of the more than $4bn it intends to spend on developing zero emission energy sources in Australia.

“NSW is absolutely number one priority for us. It is the deepest and most liquid market in the (National Electricity Market). We have a great customer base and the government has shown bipartisan support for a thoughtful, integrated transmission strategy. But yes, it does take a little longer to get through approvals,” Mr Rolfe said.

The Albansese government has set an aggressive target of having renewable energy generate 82 per cent of the country’s electricity by 2030, a key pillar in the national plan to be net zero by 2050.

But states like NSW have set their own transition goals. NSW has a target of reducing greenhouse emission by 50 per cent 2030, 70 per cent by 2035 and be net zero by 2050.

The plan requires a substantial increase in renewable energy generation capacity, and NSW’s plan is to develop so-called “renewable energy zones” that contain a mix of concentrated zero-emission sources, allowing the state to minimise the building of new transmission lines.

The plan has lured a plethora of heavyweights such as Iberdrola to pledge grid-scale new developments.

But other developers have warned establishing zero-emission projects within them is prohibitively difficult and could mean not enough renewables are online before coal power stations are phased out.

Earlier this year, NSW approved the state’s first wind farm in 2-½ years.

Residents who live within 8km of a wind turbine in NSW have to be consulted over the development, and renewable operators say that buffer zone is too big and unrealistic for projects to proceed.

NSW energy minister Penny Sharpe last month, when announcing the extension of Eraring, said the state government would soon announce changes to the planning laws, eagerly awaited by large developers.

While renewable energy advocates will welcome an accelerated push, the transition will uproot some rural communities. Some communities are vowing to oppose efforts to install new large-scale wind or solar developments or high-voltage transmission lines through their communities, and have endorsed a proposal from the Coalition to use nuclear at the site of retiring coal power stations as a way of minimising the impact.

The Coalition has yet to reveal the proposed sites for small-scale modular reactors, and critics insist the fuel source will not be ready in time to replace coal power stations – many of whom are already near the end of their technical life.

Mr Rolfe said nuclear is a viable solution to reducing emissions in many countries, but not in Australia.

“It sort of puzzling to me as to why we would consider nuclear when we are blessed with such a remarkable set of renewable resources,” Mr Rolfe said.

The consensus opinion is that a combination of wind and solar, batteries and longer duration storage is a way easier, way cheaper solution to implement than nuclear.”

Originally published as Spanish energy giant Iberdrola targets NSW for expansion despite prolonged delays