Consultation on NSW hybrid renewable project agreement opens

The proposed hybrid LTESA would sit alongside the existing Generation LTESA designed for stand-alone generation projects, offering long-term contracts for renewable energy, firming and storage projects in NSW.

ASL, NSW’s consumer trustee for the state’s electricity infrastructure roadmap, is tasked with ensuring the long-term financial interests of consumers by improving affordability, reliability, security and the sustainability of electricity supply. Recognising that hybrid projects have an important role in meeting ASL’s stretch target of 16 GW of new generation by 2030, the new hybrid LTESA seeks to ensure hybrid wind and solar renewable projects are both commercially viable and are ultimately delivered to the market.

The hybrid LTESA aims to fast track the development and bidding process for renewable generation, firming and long duration storage projects in New South Wales, in line with the upcoming NSW roadmap tenders for new projects.

Market stakeholders are being invited to submit their views by 16 February on two potential options for the hybrid generation LTESA.

The first, a fixed shape-fixed volume product, would mean developers bid a set volume of energy they’ll supply while the government sets the fixed shape for that energy. Developers will nominate an annual payment cap on how much they receive in a year.

The second, a generation-following with price risk sharing model, would have developers offering the government a settlement based on how much electricity is actually sent into the grid, minus what they draw from it, with each developer setting a maximum amount they can pay or receive each year. This model includes a price-risk sharing percentage, currently proposed at 50%, to ensure projects are operating in a revenue maximising way.

Nick Li, an expert in renewable energy at Pinsent Masons, said: “This consultation on a hybrid LTESA was launched because there has been a noticeable shift away from standalone solar projects to solar-hybrid projects in the development pipeline. We encourage developers and other stakeholders with NSW hybrid projects in development to review this new LTESA product and provide comments to ASL.”