Introduction
Delegates, here is the September MERC Newsletter, it comes out on the day the very popular and hard working Premier of NSW Gladys Berijiklian resigns as Premier and from parliament, with a bi-election to be held no doubt before the end of this year, maybe even call an early State election……. one wonders what this action will do with Local Government elections being set down for 4th December 2021 which has already been postponed for 15 months.
Will they be postponed to February 2022, and what about the Federal election due to be held before end of May 2022, will that have a bearing on State decisions to have elections given the Covid pandemic roadmaps, targets, vaccination levels, international travel, the economy, jobs, small business surviving, etc? We definitely live in interesting times as the third tier of government, the one closet to the people, yet get the least say!!!
Please circulate the Newsletter to your fellow Councillors and senior staff, so they can appreciate and understand the excellent work the Association and you are doing on behalf of your Council and community, with regard to mining and energy related matters.
COVID-19 Virus Impact on MERC
The NSW Government continues to work very closely with Councils to support communities across the state in response to COVID19 and the changing hotspots. Unfortunately, the Orange MERC Ordinary meeting on 15th October 2021 has had to be replaced by a zoom meeting in view of the decision by the Board of the Orange Ex Services Club to not operate the Club on 14/15th October and the LGA’s that are in lockdown.
An application has been made to Department of Fair Trading to have the AGM deferred to be held in 2022 after the December Council elections results are properly declared and delegates appointed by their individual Councils to MERC.
This decision to postpone the Council elections poses a lot of complications for the implementation of statutory requirements associated with electing and inducting a new Council over Christmas and January and the appointment of delegates to various entities such as MERC that would normally occur after the elections in September each year.
Next Meetings for the Association in 2021
The Ordinary meeting on 15th October 2021 will be the last meeting for the year (as a zoom meeting) when a date for the AGM to be held in February or March 2022 (after delegates are appointed), will be determined.
The Executive Committee will have a teleconference meeting on Wednesday 13th October 2021 at 9am and minutes distributed before the meeting on 15th October 2021.
RDA Orana Proposal
Delegates on 30th July 2021 considered a membership proposal from Orana RDA to be part of the Orana Opportunity Network (ON2) and participation in the UNSW Research Project on the Economic Impacts of Mine Automation in the NSW Orana Region and an offer to present at a future meeting.
MERC subsequently resolved to confirm the request from the CEO and Director Regional Development to present the proposals to the next meeting of MERC on 15th October 2021 in Orange face to face meeting. The CEO has indicated that RDA Orana Chair and CEO will present to MERC on 15th October 2021, however this will be a virtual presentation, due to the LGA’s involved being in a lockdown situation.
Minister for Planning & Public Spaces
The Hon Rob Stokes, Minister for Planning & Public Places indicated he was able to address delegates virtually on 15th October 2021 on reforms undertaken by the State Government in recent times, particularly those that affect regional councils and communities on changes to contributions, however he has indicated that he is now unable to attend as he is required for parliament that day. He is organising an appropriate (yet unnamed) Senior Executive Director to address delegates in his place.
Background to the proposed changes to the current contributions system (Environmental Planning & Assessment Amendment (Infrastructure Contributions) Bill 2021 as outlined in the
Sydney Morning Herald, article by City Editor, Matt O Sullivan, 11th August 2021:- “NSW Planning and Public Spaces Minister Rob Stokes has warned that delays to a shake-up of developer levies will lead to communities missing out on new local roads, parks and other vital infrastructure.
The state government’s plans for an overhaul of developer contributions to help pay for community infrastructure projects have been dealt a blow after an NSW upper house committee called for a halt to new laws until the full extent of the changes has been fleshed out.
Sydney councils have voiced concerns that a shake-up of developer levies will deny them funds for community projects. While he accepted the committee’s recommendation, Mr Stokes said the longer the overhaul was delayed, the “longer we miss out on the infrastructure necessary to support future growth. The only contributions system that would equally delight all stakeholders is one where councils receive a lot of money and landowners contribute no money,” he said. “That would leave the entire infrastructure bill with the general taxpayer, which would be entirely unfair and unacceptable.”
Mr Stokes, who needs the support of Labor or minor parties in the upper house to pass the laws, said the importance of the proposed changes could not be understated, warning the existing system was “opaque, inefficient and does not deliver the infrastructure that the people of our state deserve. We knew this reform wouldn’t be easy, which is probably why it was in the too-hard basket for so long,” he said.
The upper house committee’s advice to halt the legislation’s passage through Parliament until draft regulations have been developed and released for consultation comes after councils demanded last month that it be withdrawn. The peak body for councils in NSW welcomed the committee’s stance and reiterated that local governments were “absolutely opposed” to changes that potentially left communities worse off. “Dealing with developer contributions in NSW needs to be managed with more transparency, not less,” Local Government NSW president Linda Scott said.
New sport complexes, libraries ‘at risk’ from developer levy shake up
“It’s important that members of the Liberal, National, Labor and Greens parties, alongside members from a range of minor parties, all came to one view – that developers shouldn’t be given a free kick.” Councils have been concerned that the proposed changes will reduce the type of community projects eligible for funding from developer levies and give the Planning Minister greater discretion over where funds are spent.
They also fear plans to pool developer contributions into regional funds gives no guarantees the money will be funnelled back into projects in areas where levies had been collected. Greens MP Cate Faehrmann, who chaired the committee, said a key concern was the lack of detail in the bill, which made it impossible to determine whether it would have a positive impact. “These are significant reforms … and we want to see that they are done right,” she said.
Developer levies under review in bid to boost housing supply, economy
Developer lobby group Urban Taskforce said the recommendation to defer the draft legislation was “disappointing, but unfortunately inevitable. It is not surprising that the bill is seen to be not ready to progress given the lack of detail available,” Urban Taskforce chief executive Tom Forrest said.
But the NSW branch of the Urban Development Institute of Australia, which represents the property industry, said the “last thing the industry needs” was more uncertainty from the NSW Legislative Council on reforms to infrastructure contributions. “This will exacerbate the housing supply and affordability crisis across the state,” president Steve Mann said.
CRC for Transformations in Mining Economies (CRC TiME)
MERC is a partner with CRC TiME on a no cost but consultative basis. They have webinars and workshops on their progress with the CRC establishment and their collaboration efforts.
As relevant activities present, delegates will be kept informed on them for participation. The latest update on progress with their research project as follows: “As discussed, this represents a key stage in the development of our organisation as we move from our Foundational to Operational Stage. Critically, this means making the most of the opportunity presented through our unique partnership and to deliver against the priorities outlined emerging from our journey thus far and captured in our 2021-2024 Research Prioritisation Plan.
The release of the 2021-2024 Research Prioritisation Plan in August brought together knowledge gained from over 3 years of consultation informing the formation of CRC TiME and progress made in the delivery of our Foundation Portfolio of projects. The Plan that will underpin our core activity for the 2021-2024 period. It has identified a unique roadmap not but also framed a path for in mine closure and post mine transitions .
How will CRC TiME develop projects that are innovative and collaborative, deliver on the needs of our partners and create transformational change ? It all starts with an idea. Our idea submission process has opened and we are seeking ideas from across our 75 partners and key stakeholders to seed the development of our next portfolio of projects. We are supporting this with workshops that bring partners together around shared priorities or regions of interest – watch this space! Ideas will be curated through the CRC TiME project development pipeline and opportunities built for partners to join projects and contribute to their scoping proposal.
Critical in this journey over the next 10 years will be our annual forum. While the current COVID-19 situation has moved this year’s forum to an online format, we are still moving forward with an agenda that will both share knowledge through plenary sessions and deliver workshops that create connections and frame and address current priorities.
Excitingly, our $4.9M portfolio of Foundation Projects have begun delivering their findings. With six project reports submitted for review, we are now working on sharing what we have learnt. These will be showcased at the annual forum and Project Reports and Fact Sheets will soon be available on our website as they are finalised and distributed.
Our project portfolio represents a truly unique perspective across the diverse themes, institutions and stakeholders that connect mine closure decision making with post mine transitions, creating a solid foundation for our partnership to drive transformative change”.
Strategic Plan 2020 – 2023
The Strategic Plan 2020-23 Strategic Directions, Deliverables and Actions were adopted by delegates at the Ordinary meeting on 27th November 2020 and is full of new strategies to be implemented over the next three years which will hopefully help with membership growth and involvement of members. It is on our web page for reference.
LGNSW Special Conference 28th February – 2 March 2022
The LGNSW AGM and Conference will be broken into two parts being on 29th November 2021 (for the Annual Conference where the AGM to be conducted virtually) and February/March 2022 (Special Conference for the debating of motions, trade displays, workshops and conference speakers that MERC will attend with trade display).The Executive Officer has been in contact with the event manager and has submitted the appropriate application to set up a trade booth at cost of $4000 plus GST to promote membership of MERC.
Renewable Energy Zones
Recent reference group meetings for the Central West Orana REZ was held on 2nd September 2021 and the New England REZ on 24th August 2021. Minutes will be forwarded as received. For more information about NSW REZs please visit www.energy.nsw.gov.au/renewable-energy-zones or email rez@planning.nsw.gov.au.
James Hay, Chief Executive, Energy Corporation of NSW, Deputy Secretary, Energy, Climate Change & Sustainability, Department of Planning, Industry and Environment has developed a Electricity Infrastructure Roadmap newsletter on progress with the REZ’s:
“Welcome to the September NSW Electricity Infrastructure Roadmap newsletter. This update includes:- Introduction to the new Roadmap Virtual Room ; Update on policy and design paper consultation; Draft Central-West Orana Renewable Energy Zone Declaration and Results of the New England Registration of Interest.
I’m excited to share the launch of the Roadmap Virtual Room, a new interactive online tool for you to learn more about the Electricity Infrastructure Roadmap and what it means for NSW consumers, regional communities, the energy industry and investors.
An important milestone has been reached in implementing the Roadmap with the draft declaration of the Central-West Orana Renewable Energy Zone (REZ) being finalised and now on public exhibition until 15 October. It’s the first step in formalising the REZ under the Electricity Infrastructure Investment Act 2020. The declaration sets out the intended network capacity (3 GW), geographical area (location) and infrastructure that will make up the REZ.
In other good news, we have received an overwhelming response to our recent Registration of Interest for the New England Renewable Energy Zone (REZ), with a massive 34 GW from 80 projects offered up from potential renewable energy, storage and network infrastructure projects; four times the level of interest needed to fully build the REZ. We thank all parties who registered interest.
We’ve also been progressing consultation on key policy and design papers, which are critical to finalising the policy framework and regulations, as part of implementation of the Roadmap.
We have just released two policy papers for public feedback – Electricity Infrastructure Fund and Electricity Infrastructure Safeguard – and will be running online sessions in mid-October to brief stakeholders and receive initial feedback. We value your time and insights on these papers. Thank you to the 300+ participants who attended the online session last month on the Long-Term Energy Service Agreements Design Paper and those who provided submissions (closed 10 September). We’re also grateful for the valued input received in industry briefings, reference and working groups, as well as other forums.
Due to ongoing COVID-19 restrictions, we’re continuing to host engagement sessions online. We’re monitoring the situation and will provide further information about face-to-face sessions as circumstances change.”
Related Matters of Interest – Mining and Energy Issues
“Regulatory Madness Promotes Dirty Diesel Over Renewable Mini Grid at Broken Hill “Giles Parkinson writes in Renew Economy 1st October 2021 as follows:- Transmission company Transgrid may have to cancel plans to build a world-first renewable energy mini-grid near Broken Hill, and be forced instead – by archaic regulations – to buy and maintain two ageing diesel generators to secure the power supply in the mining and tourism town.
The bizarre situation emerging in Broken Hill, where highly polluting fossil fuel assets are preferred over new clean energy solutions, is yet another example of the complete failure of Australia’s energy regulations to keep pace with technology and the evolving climate crisis.
Decisions across the grid – be it for new regulated investments such as networks, or in the setting of market rules – are being distorted because the Howard government decided in the late 1990s to deliberately exclude environmental considerations from the then newly formed National Electricity Rules. And the grid has been paying the price ever since, because the regulator and rule makers are unable to take environmental and climate benefits into account. And narrow economic theory is also not helping.
Broken Hill is a prime example. The city and the surrounding mining province are located at the end of a long (260km) single line, and is prone to frequent outages. Back up supply is currently provided by two 25MW diesel generators, but their owner, Essential Energy, wants to sell them, or close them.
Options are needed, and Transgrid last year released a detailed report which – somewhat surprisingly – found that a world-first renewable micro-grid based around a 200MW compressed air storage facility, using technology from Canada’s Hydrostor and supported by Australia’s Energy Estate, was the best option. “This creates a wonderful opportunity to bring Broken Hill back up into the 21st century,” Andrew Kingsmill, the then head of Transgrid’s network planning, said at the time. “This is a prime example of the value of grid- scale storage in the future power system and a project with which TransGrid is proud.”
But then the lawyers intervened, and it was decided that the Transgrid document, known as a PADR (Project Assessment Draft Report (PADR), had to be redone, to conform to the regulator’s narrow economic assessments.
Under these rules, the 40-year diesel generators are assumed to be able run for another 20 years, and the cost of their purchase is assumed to be zero, because the purchase price paid by Transgrid is cancelled out by the payment to Essential and the reduction in that network’s regulated asset base.
That means that buying the diesel generators and keeping these highly polluting and maintenance heavy machinery is now deemed to have a greater net economic benefit than all the alternatives, including the planned mini-grid and multiple big battery options. Transgrid is clearly not happy about it. “We have concerns that prolonging the use of fossil fuel technologies is inconsistent with the Sustainability Strategy of Broken Hill City Council or the general transition of the electricity sector to low emission technologies,” it writes in its new report.
It also notes that the diesel turbines are one trick ponies. They can only operate in “islanded mode” and can’t deliver broader, longer term market benefits, unlike the compressed air energy storage solution, which can store excess power from existing wind and solar farms, and provide incentives for more renewables and cheap power for new mining projects.
That means it can secure power for the Broken Hill region when the main transmission line is out of service, using local wind and solar resources, such as the 200MW Silverton wind farm and the 53MW Broken Hill solar farm. At other times it will be able to store renewable generation from southern NSW that would otherwise be spilt and make it available at other times.
But Transgrid says the benefits could be even greater, because they could be scaled into a larger solution to accommodate potential new mining loads in the Broken Hill area. This was the thrust of a study commissioned by Hydrostor and Energy Estate last year, which noted that its proposal – unlike the diesel turbines – could support more renewables in the region, and offer cheap power to encourage new mines.
Even the mayor of Broken Hill, population 17,000, was on board. “It will bring employment and energy security to our region and provide a new method of utilising mining infrastructure,” Darriea Turley said at the time. It’s absurd, but it’s the state of the Australian energy market, and these narrow parameters have been guiding decisions made by the AER, and the Australian Energy Market Commission in the assessment of the myriad rules of the market and major multi-billion dollar network investments.
Only the Australian Energy Market Operator, in its detailed 20-year blueprint known as the Integrated System Plan, has taken account of the need to reach zero emissions. But its blueprint is only a guide, and the federal government has all but ignored it.
ACT energy minister Shane Rattenbury is trying to rectify the situation, and in last week’s meeting of state and federal energy ministers gained approval to work on ways to get the environment written into the rules. “This is important for ensuring emissions intensity of generation is considered and reducing emissions is prioritised” in regulatory and policy decisions.
Transgrid agrees. It recently wrote to the AEMC arguing that the RIT-T (regulatory investment test) should be broadened to include other relevant quantifiable economic and environmental benefits. This is particularly important for the major projects identified in AEMO’s 20year blueprint. “Whilst it might be appropriate to apply a relatively narrow test for small scale augmentations or asset replacement, this is not appropriate for projects such as those in the ISP,” it wrote. “The widely recognised costs to the Australian economy of climate change are not included in the current cost-benefit analysis in the RIT-T.
“This means that under the current RIT-T, the economic benefits for ISP projects such as Project EnergyConnect (which is facilitating large amounts of renewable generation into the system) and HumeLink (in terms of both Snowy 2 as renewable power source as well as providing a pathway to market for renewable energy from Snowy and other generation in the area) are undervalued.”
In relation to Broken Hill, Transgrid’s head of delivery, Craig Stallan, said: “The narrowness of the Regulatory Investment Test produces suboptimal outcomes for the energy consumer and the wider community. “Clean, renewable energy solutions become preferred when taking into account the full quantifiable economic and environmental benefits.”
Hydrostor president Jon Norman told RenewEconomy from Canada on Friday morning that his company was pleased that its compressed air storage solution was deemed as the best non-diesel alternative, and it is considering its options it can bring to the table to make it the front-runner. One option might be to buy the diesel plants itself, and then phase them out as the new storage system is built. “We think there are a few pathways,” Norman said. “Diesel is not really a viable solution long term, we do feel our project is a better overall long term solution.”
Hydrostor in May signed a contract to build a massive one gigawatt storage facility in California, using technology that Norman describes as like a “giant air battery”. The technology uses off-peak renewable electricity to run a compressor that produces heated, compressed air, which is then stored in underground caverns. When needed, the compressed air is expanded through a turbine to generate electricity.
The situation is frustrating many parties, but it’s not quite the end of the matter. There will be further consultations – submissions are open to all parties until November 17 – and then Transgrid’s regulation team will put together another document, known as a PACR (Project Assessment Conclusions Report) in the long and tortuous path to regulatory approval. That is due in March next year.
“Bango Wind Farm Starts Powering Up with 10 Turbines Fully Operational” Sophie Vorrath, writes in Renew Economy, 1st October 2021 as follows: “ Just under half of the wind turbines that will make up the 224MW Bango wind farm in the New South Wales Southern Tablelands have been fully installed, the project’s developer has confirmed, and 10 are fully operational.
In an update on the $500 million project this week, CWP Renewables said 22 of the 46 wind turbines were now fully erected at the site 30km north of Yass, and 75% of all works completed. CWP Renewables project manager Jonathan Post said a further seven towers had been built and were awaiting turbine blades, while another 14 had their first two tower sections installed. “Turbines in the western cluster are now undergoing progressive hold-point testing, which will see the number of turbines energised and then generating electricity increase over four stages,” Post said.
Hold-point testing is a mandatory testing regime coordinated with – in this case – TransGrid and approved by the Australian Energy Market Operator. For wind farms, it checks the performance of turbines and the capacity of the grid to take up the energy they generate. As RenewEconomy has reported, this is not always a smooth or timely process for wind or solar farm developers, particularly as more and more large-scale projects join the grid.
Australia’s biggest wind farm to date, the 530MW Stockyard Hill facility near Ballarat in Victoria, passed its first “hold point” test in July of this year, more than six months after completing construction of the last of its 149 turbines. The state and federal governments are working to improve the efficiency of the process, however, largely by bolstering existing transmission infrastructure and adding new state interconnection links.
In NSW, the state government in June announced a commitment of $380 million to help accelerate the development of new grid connection infrastructure for its first dedicated renewable energy zone in the Central-West Orana region. The Bango project was in 2019 reported to be the first in the world to use General Electric’s Cypress 5.3MW turbines, which at that time ranked amongst the largest onshore wind turbines in production, as well as to be installed so far in Australia.
CWP seems to like to aim big for its projects – it is also leading the huge Asian Renewable Energy Hub consortium in the Pilbara region of W.A. which has grown in ambition from 15GW of new wind and solar to 26GW. It is also a chief proponent of the even more massive $100 billion Western Green Energy Hub – comprising 50 gigawatts of wind and solar capacity – proposed for the southern coast of Western Australia to create millions of tonnes of green hydrogen for use in Australia and for export.
Once completed, Bango wind farm will generate up to 748GW hours of renewable energy a year – enough to power around 120,000 homes.
“NSW Government Sets More Ambitious 50pc Emissions Reduction Target for 2030” Ashleigh Raper, ABC writes, 28th September 2021:- “The NSW government has committed to an ambitious new emissions reduction target, pledging to halve greenhouse gas pollution by 2030. Key points:
- The policy change means NSW has a similar emissions reduction target to Victoria and South Australia
- The government says its electric vehicle strategy and renewable energy investment will make the target achievable
- The change comes as the federal Coalition remains at loggerheads over committing to a net zero target for 2050
The 50 per cent target is a steep increase on the government’s previous 35 per cent goal to reduce emissions below 2005 levels by 2030. Premier Gladys Berejiklian said it was all part of the state’s plan to get to net zero by 2050. “Our net zero plan is expected to attract more than $37 billion in private-sector investment into NSW,” she said. “This policy is about putting policies in place to give industry and investors certainty, not only to protect our planet but to futureproof our prosperity.”
The interim target brings NSW in line with Victoria, which has a 45 to 50 per cent aspiration for 2030, and closer to South Australia which is aiming for more than a 50 per cent reduction by 2030. South Australia is already more than 50 per cent of the way to achieving net zero emissions by 2050. There are still questions around how meaningful these targets were to global efforts to address climate change.
The UK-based climate and energy think tank, Ember, found emissions from Australian coal burnt overseas released was double the country’s domestic greenhouse gas footprint in 2020. In an interview with ABC Radio Sydney on Wednesday morning, the Premier would not confirm whether the modelling accounted for the agricultural sector, which according to the Climate Council accounts for up to 13 per cent of the country’s carbon footprint.
Environment Minister Matt Kean said, who said stepping ahead of the Commonwealth was “the right thing to do”, said countries were responsible for their own emissions target. Mr Kean also said the modelling for the new emissions target “considered the growth of the coal sector” in NSW. “A number of those countries we send our coal to have also committed to net zero emissions,” he said. “So the coal industry here in NSW won’t be affected by domestic policy makers, it is going to be affected by the decisions of borders overseas and governments overseas.”
He was confident the state government’s electric vehicle policy and its investment in renewable energy infrastructure would ensure the new target was met. The commitment comes at a time when there is growing division within the federal Coalition over setting a net zero emissions target by 2050. Mr Kean said his colleagues in federal parliament were “not being ambitious enough”. “My message to the Commonwealth is get on with it, this is not only the right thing to do, it is also the economically rational thing to do, because it is in our nation’s economic interest,” he said.
Nationals senator Bridget McKenzie this week openly criticised some of her Liberal colleagues for advocating for a target. But in NSW, the Coalition partners are aligned. Nationals leader and Deputy Premier John Barilaro has given his full support to the new target. “The entire state will benefit from the economic and employment opportunities in low-carbon technologies,” Mr Barilaro said. “We will continue to take action in a way that delivers more jobs and more investment for people in the city and the bush.”
The federal government’s current position is that net zero will “preferably” be reached by 2050 and it has committed to reducing emissions by 26-28 per cent by 2030. On September 1, the NSW government began providing rebates and phased out stamp duty for some electric vehicles (EVs) as part of its strategy which aims to increase EV sales to 52 per cent by 2030–31
“Battery Sued Over Coal Fail”, Article Industrial Careers, 27th September 2021 :- “South Australia’s big Tesla battery is being sued for not helping during the failure of a Queensland coal power station. The 150-megawatt Hornsdale battery was built to provide more stability to the electricity grid and receives payments to be on standby to pump energy into the grid at short notice.
This is meant to mitigate system failure when major power plants or transmission lines go down. But the Australian Energy Regulator (AER) now says Hornsdale did not deliver as promised when a major Queensland coal plant failed in 2019, “creating a risk to power system security and stability”.
Legal action against Hornsdale Power Reserve has been launched in the wake of another case that saw the AER successfully obtain financial penalties from wind farms for failures associated with South Australia’s statewide blackout.
The AER alleges Hornsdale Power Reserve — owned and operated by the French renewable energy company Neoen — did not provide the services it was paid for by the Australian Energy Market Operator (AEMO) during a power system disruption at the Kogan Creek Power Station in Queensland in October 2019.
“It is vital that generators do what they say they can do if we’re going to keep the lights on through the market’s transition to variable renewable generation,” AER chair Clare Savage says. “We expect providers to be in a position, and remain in a position, to respond when called upon by AEMO. “Failure to comply with the latest market ancillary service offer and AEMO dispatch instructions is in breach of the National Electricity Rules and may result in AER enforcement action.”
Disclaimer The comments and details in the articles in this newsletter do not reflect the views, policies or position of the Association or its member Councils and are sourced and reproduced from public media outlets by the Executive Officer to provide information for members that they may not already be exposed to in their Local Government areas
Contacts
Clr Peter Shinton (Chair) peter.shinton@warrumbungle.nsw.gov.au 0268492000 or Greg Lamont (Executive Officer) 0407937636, info@miningrelatedcouncils.asn.au.