$2bn NSW gas deal to lower emissions, power prices
The agreement aims to boost gas supplies to NSW while also lower electricity prices through emissions-reduction initiatives.
NSW Premier Gladys Berejiklian has signed a $2 billion deal with the federal government to significantly increase the gas supplies to the state, a move that is expected to bring down power prices and help the country reach its emission reduction targets.
Speaking in Sydney, Prime Minister Scott Morrison said the Memorandum of Understanding signed on Friday morning would seek to boost gas supplies to NSW while also lower electricity prices through emissions-reduction initiatives.
A separate tranche of the bilateral proposal, one in a series that is expected to come between the commonwealth and the states, would seek to establish a renewable energy zone in the state’s central west to help large-scale renewable generators.
“It’s about getting electricity prices down, getting emissions down, getting more power into the system, and getting the gas to make that happen,” Mr Morrison said.
NSW will commit $1 billion to the deal while the Commonwealth will supply the rest of the money. The commonwealth side of the deal is largely comprised of grant money for “NSW-based emissions reduction initiatives”.
But the headline target of the package will be to supply an extra 70 petajoules of gas into the domestic market each year, or more than half of the state’s annual consumption of around 120 petajoules.
Ms Berejiklian believes NSW is already in a position to meet that target by procuring its gas from “a range” of sources, including a Santos Narrabri gas project that remains in the final stages of assessment.
A decision on the project is expected to be decided upon by the Departments of Planning, Industry and Environment “in the next couple of months”, the premier said.
“If that project is successful we have met our policy arrangements,” she added.
The Australian reported on Friday that the announcement would not assure the approval of the Narrabri gas project.
The prime minister said the energy pact, first flagged on Wednesday during a National Press Club address in Canberra, would be the first in a series of similar deals that he wanted to strike with other states and territories.
“I’d like to see other state governments make these commitments,” he said, a comment that hinted at strained negotiations with the Victorian government, which has a ban on fracking and a moratorium on conventional gas exploration.
A second tranche of the proposal is to give financial support for a pilot renewable energy zone in the state’s central west region.
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