Trystan Casey
New South Wales (NSW) has been Australia's biggest net importer of electricity, relying on its neighbours on the National Electricity Market (NEM) for up to a fifth of its demand in 2017. The NEM is managed by the Australian Energy Market Operator (AEMO) and operates the world's most extensive interconnected power system, supplying some $10 billion worth of electricity annually. NSW is largely self-sufficient in relation to electricity supply, meeting most of its local demand through state generation. The remaining electricity is purchased from other states, particularly Victoria and Queensland, through the NEM. In 2019-20, renewable energy sources provided around 19% of the state's total electricity generation, with solar and wind combined providing 14% and hydro providing 3%. NSW is one of the leading states in adding renewable energy to the electricity market and has experienced a sustained uptake in rooftop solar systems.
| Characteristics | Values |
|---|---|
| Self-sufficiency in electricity supply | NSW meets most of its local demand through state generation |
| Electricity imports | NSW purchases electricity from other states, particularly Victoria and Queensland, through the National Electricity Market (NEM) |
| Renewable energy sources | In 2019-20, renewable energy sources provided around 19% of the state's total electricity generation, with solar and wind contributing 14% and hydro 3% |
| Rooftop solar systems | NSW is experiencing a sustained uptake in rooftop solar systems, with a forecast capacity of at least 5 GW by 2030 and 7.5 GW by 2040 |
| Renewable Energy Zones (REZs) | NSW plans to establish five REZs to combine renewable energy generation from sources like wind and solar |
| Energy consumption | The transport sector is the biggest energy user in NSW, accounting for 47% of total energy use |
| Coal-fired power stations | Four out of five coal-fired power stations supplying around three-quarters of the state's electricity are scheduled to close in the next 15 years |
| Electricity prices | In 2018, the NEM volume-weighted wholesale price in NSW was $82/MWh |
| Import and export limits | NSW has different import and export limits for electricity, with positive values indicating flows north or west and negative values indicating flows in the reverse direction |
| Electricity generation | In 2017, NSW relied on its neighbours on the NEM for up to a fifth of its electricity demand |
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What You'll Learn
- NSW's electricity imports are the highest in Australia
- NSW's electricity is largely generated by coal
- NSW's electricity imports are purchased from the National Electricity Market
- NSW's electricity imports are supplemented by renewable energy sources
- NSW's electricity imports are managed by the Australian Energy Market Operator
NSW's electricity imports are the highest in Australia
New South Wales (NSW) has been Australia's biggest net importer of electricity. In the latest National Energy Emissions Audit, published by The Australia Institute, energy analyst Hugh Saddler stated that NSW relied on its neighbours on the National Electricity Market (NEM) for up to a fifth of its demand in 2017. This was despite the state having a minimal share of "intermittent" renewable energy generation, with just 9% coming from sources such as big hydro, and a significant 91% of its total generation mix derived from "baseload" fossil fuels.
The NEM is the grid-connected market that supplies most of Australia's electricity, particularly in the southeast and east of the country. In 2017, NSW relied on this market to meet a large portion of its energy demands, making it the state with the highest percentage of electricity imports. The NEM infrastructure comprises both state and privately-owned assets and is managed by the Australian Energy Market Operator (AEMO).
NSW's electricity imports come primarily from Queensland and Victoria, with these two states contributing significantly to the total supply of NSW. The import and export limits on the interconnectors between these states determine the maximum permissible flow of electricity in both directions. Positive values indicate flows north or west (e.g., from Victoria to NSW), while negative values indicate flows in the reverse direction.
While NSW has been the largest importer of electricity in Australia, it is also the country's biggest coal-generating state. The main fuel used for electricity generation in NSW is high-quality black coal, which is cleaner than coal from other states like Victoria, which uses brown coal. Despite this, coal-fired power generation contributes significantly to the country's carbon dioxide emissions, with black coal plants in NSW emitting 920,000 tonnes of CO2 per TWh.
To address its reliance on imports and reduce emissions, NSW is transitioning to renewable energy sources. The state has experienced a sustained uptake in rooftop solar systems and is forecast to have a capacity of at least five gigawatts installed by 2030 and 7.5 GW by 2040. Additionally, the NSW Electricity Infrastructure Roadmap plans to establish five Renewable Energy Zones (REZs) that will combine multiple renewable energy sources, such as wind and solar, to deliver cheap, reliable, and clean energy to the state.
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NSW's electricity is largely generated by coal
In recent years, NSW has seen an increasing uptake of renewable energy sources, with more than 30 wind and solar farms joining the grid, particularly in the southeast of the state. The percentage of renewable energy in NSW's electricity supply is rising, with solar and wind energy generation more than doubling between 2015 and 2020. In 2019-20, renewable energy sources provided around 19% of the state's total electricity generation, a fourfold increase over the previous decade.
The NSW Electricity Infrastructure Roadmap, established under the Electricity Infrastructure Investment Act 2020, aims to create five renewable energy zones (REZs) that will combine multiple renewable energy sources, such as wind, solar, and storage. This initiative will enable NSW to capitalise on economies of scale and deliver affordable, reliable, and clean energy to the state. Additionally, the state has experienced a sustained increase in the adoption of rooftop solar systems, with a capacity of at least five gigawatts projected to be installed by 2030.
While NSW is primarily self-sufficient in electricity supply, it does occasionally import electricity from other states, particularly Victoria and Queensland, through the National Electricity Market (NEM). This enables NSW to manage its supply at the lowest cost to consumers. The NEM operates the world's most extensive interconnected power system, spanning over 5,000 kilometres from North Queensland to Tasmania and central South Australia.
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NSW's electricity imports are purchased from the National Electricity Market
New South Wales (NSW) is largely self-sufficient in terms of electricity supply, meeting most of its local demand through state generation. However, it does import electricity to manage its supply at the lowest cost to consumers. NSW's electricity imports are purchased from the National Electricity Market (NEM), which operates the world's most extensive interconnected power system. This market includes Queensland, Victoria, and South Australia, with positive values indicating flows west, such as from Victoria to NSW.
NEM is managed by the Australian Energy Market Operator (AEMO), which was established by state and federal governments. AEMO also manages the day-to-day operations of several electricity and gas markets and provides strategic forecasting and planning advice. The market comprises both state and privately-owned assets.
In 2017, NSW relied on its neighbours on the NEM for up to a fifth of its demand, with most imports coming from Queensland and Victoria. This was despite NSW having a minimal share of "intermittent" renewable energy generation and a high reliance on "baseload" fossil fuels, particularly coal.
The wholesale price of electricity on the NEM in 2018 ranged from $73/MWh in Queensland to $98/MWh in South Australia, with NSW at $82/MWh. The NEM capacity in January 2019 was 50.6 GWe, including coal, natural gas, hydro, wind, and solar sources.
In summary, NSW's electricity imports are purchased from the NEM, which is managed by AEMO and includes several other states in Australia. NSW relies on imports for a portion of its demand, with prices and sources varying across the market.
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NSW's electricity imports are supplemented by renewable energy sources
New South Wales (NSW) is largely self-sufficient in terms of electricity supply, meeting most of its local demand through state generation. However, it has also been Australia's biggest net importer of electricity, relying on its neighbours on the National Electricity Market (NEM) for up to a fifth of its demand in years past. The remaining electricity is purchased from other states, particularly Victoria and Queensland, through the NEM.
To further increase its renewable energy sources, NSW plans to establish five Renewable Energy Zones (REZs) that will combine energy generation from multiple sources, such as wind, solar, and storage. By connecting multiple generators and storage in the same location, REZs can provide cheap, reliable, and clean electricity while addressing barriers to investment in energy networks.
In addition to REZs, NSW is also moving towards a two-way energy system where consumers are installing their own rooftop solar systems and exporting energy back to the grid. This trend is expected to continue, with four out of five coal-fired power stations scheduled to close in the next 15 years.
Through a combination of renewable energy sources, energy efficiency measures, and a transition to a more balanced energy system, NSW aims to reduce its reliance on electricity imports and improve its energy security and sustainability.
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NSW's electricity imports are managed by the Australian Energy Market Operator
While New South Wales (NSW) is largely self-sufficient in terms of electricity supply, it does import electricity from other states, particularly Victoria and Queensland, through the National Electricity Market (NEM). NEM is the grid-connected electricity market in the southeast and east of Australia, supplying some $10 billion worth of electricity annually.
NSW's electricity imports, along with the rest of the NEM, are managed by the Australian Energy Market Operator (AEMO). AEMO is an independent organisation that operates on a user-pays cost-recovery basis, with all operating costs recovered through fees paid by the industry. It is responsible for operating Australia's largest gas and electricity markets and power systems, including the NEM.
AEMO manages the day-to-day operations of several electricity and gas markets and information services, as well as providing strategic forecasting and planning advice. It has strategic partnerships with institutions and energy brands across Australia and globally, including the Bureau of Meteorology (BOM) and CSIRO.
AEMO's Quarterly Energy Dynamics (QED) report tracks the drivers of the NEM, East coast gas markets, and the Wholesale Electricity Market (WEM), including changes in demand and generation supply mix. The report also includes forecasts of gas supply adequacy over 20 years.
By managing NSW's electricity imports through the NEM, AEMO helps the state to manage its electricity supply at the lowest cost to consumers.
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Frequently asked questions
Yes, NSW is largely self-sufficient in relation to electricity supply, but it does purchase the remaining electricity it needs from other states, such as Victoria and Queensland, through the National Electricity Market (NEM). In 2017, NSW relied on its neighbours on the NEM for up to a fifth of its demand.
NSW relies on coal generation more than any other grid in the world, with 91% of its total generation mix coming from "baseload" fossil fuels. However, the state is moving towards renewable energy sources, with wind and solar energy more than doubling between 2015 and 2020.
NEM is the world's most extensive interconnected power system, running for over 5,000 kilometres from North Queensland to Tasmania and central South Australia. It supplies around $10 billion worth of electricity annually to meet demand. NEM infrastructure comprises both state and privately-owned assets and is managed by the Australian Energy Market Operator (AEMO).
