NSW is set to miss all emissions targets until 2050. Here’s why

NSW is set to miss all its emission reduction targets for 2030, 2035 and 2050 due to a rise in energy demand and the need to introduce policy reforms in energy pricing, planning and construction to get back on track.

The state has legislated targets of reaching net zero by 2050 and interim targets to reduce 2030 emissions by 50 per cent and 2035 emissions by 70 per cent below the 2005 baseline.

The Mount Piper coal power plant is set to be closed by 2040.Credit: Nick Moir

But since the road map to reach those targets was set out, energy demand has increased more than expected and the construction of new renewables has not progressed as quickly as projected, according to analysis by the NSW Productivity and Equality Commission.

The slower-than-expected switch from gas to electricity will also push up NSW emissions, the analysis says, as will increased industrial output.

The new projections show that by 2030, the state is likely to have reduced emissions by 44 per cent on 2005 levels, rather than the 50 per cent target. An earlier projection suggested NSW would reach a 56 per cent fall by that date.

The report published on Friday, Ensuring a Cost-Effective Transition, says it is difficult to make accurate projections up to 2050 given technological advances over the decades, but current projections “paint a cautionary picture of risks to achieving a net zero outcome if we don’t have cost-effective policies to drive it”.

The report says that if NSW is to reach its targets, the government needs to focus on electrifying the state’s energy system as its four remaining coal-fired power stations close by 2040.

To do so at the lowest possible cost, it needs policies to accelerate electrification, provide incentives for households to change their behaviour and give businesses certainty to commit to investment in large and long-term projects.

NSW Productivity and Equality Commissioner Peter Achterstraat said the most effective way would be an economy-wide emissions price, which he conceded was not on the table.

Failing that, he said, costs could be driven down if households were given access to smart meters, allowing them to use electricity when it was most abundant and cheap.

“While rolling out smart meters is the responsibility of energy retailers, I support governments looking at the costs and benefits of policies that could accelerate their uptake in cost-effective ways.”

He said the government needed to streamline planning approvals for renewables projects.

“Clearly, time is of the essence here, and if we can speed up all stages of the process, and the planning is a big one that benefits everybody.”

He added that over recent years, large infrastructure development had limited the amount of labour available to build housing and renewables projects.

“If we don’t allow the housing and the renewable industries to have their fair share of construction workers, that is going to delay things.”

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