NSW plan­ning pro­cesses un­der fire from gas users

The Weekend Australian - Travel - - Resources - Keith Orchi­son

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

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

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