A not so mighty wind: NSW lags in renewable energy approvals

The approvals process for new renewable projects, particularly wind farms, in NSW is the slowest and most expensive in the national energy market despite looming energy shortages causing the Minns government to commit up to $450 million to extend the life of the Eraring coal power station.

Wind energy proponents have told global energy consultancy Rystad Energy that the process for securing approvals in NSW was slower, more complicated and more expensive than in other states, said David Dixon, a senior analyst with the company.

The growing wind industry fears antipathy from the NSW planning department.Credit: Dominic Lorrimer

The delays have increased over recent years, he said, even as the need for renewables was growing greater.

“This is crazy, considering that in New South Wales, we’re meant to be retiring coal. In nine years we are going to be down to one power station. We are running out of time to replace them [coal-fired power stations], and they [wind farms] take time to build,” Dixon said.

“It is ridiculous how long it is taking these new projects to get through the approvals process. If there is a legitimate reason for a wind farm not to be built in an area, then we should acknowledge that and move on, but there is no reason for it to take five years to come to a decision.”

The Minns government announced last week it would pay Origin Energy up to $450 million over the next two years to extend the life of Australia’s largest coal-fired power station, Eraring, in a bid to prevent forecast energy reliability gaps.

‘The planning approval process in NSW is 2-3 times slower than other states, adding 4-7 years to project progression.’

Excerpt from a report into the speed of the transition to renewable energy

Stephanie Bashir, chief executive of Nexa Advisory and a former senior director of public policy at AGL Energy, said Nexa had warned the government in a report last year that delays in renewable project approvals meant NSW faced a “reliability gap” should Eraring be allowed to close in 2025, as was then expected.

Bashir said the gap could be addressed by speeding up the approvals process for renewables projects already in the system.

“Delaying the closure of ageing coal-fired power stations, such as Eraring, to shore up power supply reliability in the near term will result in higher costs and emissions over the long term. The better approach would be to accelerate the rate at which we deploy new clean energy resources,” said that report.

NSW is the only state to levy application fees based on project capacity and value, which means that a 1.5 GW project attracts a fee of $4.5 million, 150 times the cost of an equivalent project in Queensland, said the Nexa report.

“The planning approval process in NSW is 2-3 times slower than other states, adding 4-7 years to project progression and 25 times more expensive for developers compared to an equivalent project than in Queensland.”

The situation in NSW is also replicated at a national level, with investors warning onerous environmental regulations are delaying Australia’s ambitious renewable rollout and threatening the federal government’s climate commitments.

Organisations such as the Clean Energy Investor Group say it is now taking between two and three years for assessments of renewable projects to be completed at the federal level, even as the Albanese government says Australia must accelerate renewable energy generation over the next six years to double the current level of 40 per cent of the grid.

Rystad’s David Dixon said delays in NSW have been getting worse over the past few years, even as the state government legislated its emission reduction targets and moved to address looming energy shortfalls.

“Five or six years ago when there was a boom [in energy projects] in Australia the development application time was anything from six months to 18 months. Nowadays, the wind farms in NSW that actually get through take up to five years, and there are not many getting through.”

One wind farm proponent said the problem had become so bad that he believed there was active antipathy for wind projects by one or more senior individuals in the planning department. Both Dixon and Bashir said they had heard similar stories, showing that the industry no longer trusted the planning process.

Planning Minister Paul Scully acknowledged the frustrations with the approvals process but said it was improving.

“Historically, the NSW assessment of renewable energy projects has been slower than we would want or what was needed to achieve our renewable energy ambitions. When Yanco Delta wind farm was approved last year, it was the first wind farm to be approved in NSW in nearly three years.”

Scully said 18 renewable energy developments assessments had been completed in the past year, compared with seven in 2022.

“Currently, 29 new renewable energy projects which would produce 16.5 GW are under assessment by the Department of Planning, Housing and Infrastructure. Most of them expected to be determined this year. A further 84 including more solar, wind and battery storage projects are in the pipeline at various stages,” he said.

“While there are 13 projects currently being constructed, there are 40 projects totalling more than 7770MW which have been approved but yet to commence construction.

“The substantive increase in renewable energy project proposals signals trust from the industry in our Government’s capacity to move projects through the planning pipeline.”

He said the government was currently finalising a new “Energy Policy Framework” to speed up the assessment process.

Dixon said in talks he had held with five wind energy proponents he had been told the NSW planning department typically asked for more information than those in Queensland, often set up and then cancelled crucial site visits and pushed developers towards more complex sites, substantially increasing the costs of development applications.

He said while some communities had valid concerns about proposed wind farms, some organisations opposed them for political or ideological reasons. Because they only needed to raise 40 or 50 objections to halt a major project, developments of major community benefit could be derailed by small groups.

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