NSW planning processes under fire from gas users
THE gas-fired generation sector is seeking ‘‘ dramatic improvement’’ in planning approval processes in NSW, the largest region of the national electricity market.
Generators have criticised the NSW project regulation as ‘‘ excessively expensive’’ and ‘‘ excessively time consuming’’ when compared with processes in other states.
Trevor St Baker, chairman of ERM Power, describes NSW planning processes as ‘‘ still problematic for fasttracking substantial, state-significant investments’’. His company, in a joint venture with Babcock & Brown, is constructing a 640MW open-cycle peaking power station at Uranquinty, near Wagga Wagga, at a cost of $500 million and plans to start work on a similar-sized plant at Wellington next year.
Gas for the projects sourced from Bass Strait.
St Baker claims that the delay to the development of the Uranquinty plant — which is now due to be in commercial production in December next year — is directly attributable’’ to the difficulty the joint venture encountered in gaining planning approval.
He says the process is protracted’’ and confused’’. The delay, he adds, means that NSW generation capacity has fallen below internationally accepted levels and the state is
being ‘‘ critically exposed’’ to higher than forecast peak demands for electricity and failures of existing power plants.
While the state Government has significantly revised approval processes for major projects since ERM initiated the Wagga development, St Baker complains in his recent submission to the Owen inquiry into new generation for NSW that they remain a substantial component of the lead time from planning to commissioning a gas-fired plant, and a source of considerable uncertainty.
St Baker says ERM accepts that community consultation is an important element of a planning approval process, but complains that in NSW the system requires addressing the legacy of coal-fired generation developments and public perception of air pollution.
The process, he says, is ‘‘ an exercise in second-guessing all possible concerns at the expense of considerable time and resources’’ while still being subject to wideranging ministerial discretion.
St Baker points also to frustration with the planning situation leading to the company putting power station projects at Cobar and Bega in NSW on hold. Both developments, he says, would defer substantial network upgrade work by the state Government, ‘‘ but we have been unable to obtain any certainty from either transmission or distribution network service providers on the pass-through of future avoided costs.’’ He argues that the regulatory tests applied to network augmentation ‘‘ lack transparency and objective independent assessment,’’ leading to major network projects being undertaken which ‘‘ extend the market for coal-fired generation where cleaner and more economic distributed generation options appear to be available.’’
NSW, St Baker says, needs to structurally reform its governmentowned electricity industry to create a more stable investment environment, to further reform the planning process and to establish a more focussed greenhouse gas abatement scheme.
St Baker’s complaints are echoed by Babcock & Brown Power.
In a submission to the Owen inquiry, chief executive Paul Simshauser said the BBP experience suggests ‘‘ there is room for dramatic improvement in the planning approval processes in NSW for a major plant.’’
Application processes, he added, are excessively expensive and excessively long when compared to requirements in South Australia and Queensland.
The state Government, he says, can promote a more favourable investment climate through greater certainty in its greenhouse policy, market-oriented energy sector policies and improved planning.
Problematic: Paul Simshauser says application processes in NSW are excessively long