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Hunterenergyplan

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Hunterenergyplan

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Hunterenergyplan

  1. 1. 08/04/2017 Commercial-in-Confidence 1 Hunter Energy Plan A solution for NSW energy crisis
  2. 2. 08/04/2017 Commercial-in-Confidence 2 NSW energy crisis – current position and challenges • Gas – traditionally used by industry and consumers • Challenge – shortage • Sourcing – 95% imported from other states • Security of supply – transported long distances by pipeline mainly from Bass Strait and the Cooper Basin • Infrastructure constraints – limited pipeline competition and capacity • Leading to – shortages/lack of firm contracts to supply industry • Ddisincentive for investment • Rising prices – highest in the world – LNG buyers paying $8-$9, today’s domgas price $10-$12 and rising • Industry non-competitive – loss of businesses and jobs • Household budgets under pressure • Risk of gas shedding (power blackouts) in summer and winter
  3. 3. 08/04/2017 Commercial-in-Confidence 3 2 3 4 5 6 7 8 9 10 11 12 13 4/1/2016 5/31/2016 7/30/2016 9/28/2016 11/27/2016 1/26/2017 3/27/2017 GasPrice($/GJ) 30 Day Avg STTM Price 01/04/2016 - 31/03/2017 Historical NSW Gas Prices 2013 Avg Price 2010 Avg Price
  4. 4. 08/04/2017 Commercial-in-Confidence 4
  5. 5. 08/04/2017 Commercial-in-Confidence 5
  6. 6. 08/04/2017 Commercial-in-Confidence 6 Gas is now critical for electricity generation • Gas-fired power stations – now the best option for stabilizing the grid • Low capital cost • Short lead time – can be constructed quickly, within 12 months • Can be turned on/off quickly – perfect complement to underpin renewables • Small footprint – can be located close to demand • Less than half the CO2 emissions of black coal and 70% lower emissions than brown coal • Perfect for clean energy transition over next 20 years until effective and competitive grid-based battery technology is developed
  7. 7. 08/04/2017 Commercial-in-Confidence 7 NSW energy solution • Fast track Development Approval, construction and start-up of Narrabri Gas Project • 1.2TCF proven resource • A$2 billion investment • Construct Hunter Gas Pipeline from Narrabri to Newcastle • Development Approval already in place – shovel ready; MOU for construction and operation with Jemena • A$500 million investment • Guarantees gas supply to Sydney Basin via Newcastle • Guarantees gas for electricity generation • 667MW Colongra power station on Central Coast • Future power stations, already approved (2000MW Bayswater; 770MW Tomago) • Future-proof NSW electricity grid
  8. 8. 08/04/2017 Commercial-in-Confidence 8
  9. 9. 08/04/2017 Commercial-in-Confidence 9 Benefits for NSW • Gas to domestic market secured • Gas supply for Colongra and future gas-fired power stations • Security of gas supply makes NSW attractive investment destination • Shorter, already-approved pipeline route means gas to market sooner and more competitively • Increased competition in east coast pipeline network • Gas supply and industry opportunities for towns along route – Upper Hunter, Scone, Muswellbrook, Singleton • $2.5 billion capital spend for NSW economy • Ongoing revenue from gas royalties for NSW Treasury
  10. 10. 08/04/2017 Commercial-in-Confidence 10 What can NSW Government do? • Fast track Development Approval of Narrabri Gas Project • Consider condition that gas (at least 50PJ per annum) must be used to supply domestic NSW market, particularly Hunter and Sydney basin • Ensure environmental conditions allow construction immediately and cost- effectively • Consider condition that there must be an open, competitive process for pipeline transportation • Hunter Gas Pipeline very competitive – already-approved, shorter route to market

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