At present, approximately 80% of the electricity produced in NSW is sourced from coal. Coal fired power generation contributes to grid services such as inertia and frequency response ensuring a secure and stable power grid in NSW and the National Electricity Market (NEM).

However, coal fired power generation produces higher CO2 emissions than other generation options and accounts for about 36% of the state’s total greenhouse gas (GHG) emissions. Together with fugitive emissions from mining coal, 48% or nearly half of the state’s total GHG emissions come from coal production and utilisation.

Australia has committed to reducing its GHG emissions by setting targets under the 2015 United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP21). Australia has established 26 to 28 per cent below 2005 levels by 2030 as its Intended Nationally Determined Contribution (INDC). To complement the Commonwealth Government’s 2030 emission reduction targets, the NSW Government has announced an aspirational transitional objective of achieving net-zero emissions by 2050.

To understand what role coal fired power generation and low emissions coal technologies (LECT) can play to ensure a reliable, affordable and sustainable electricity future for NSW, the CINSW Ministerial Advisory Council recommended to the Minister that a detailed forward modelling study be undertaken.

The study, known as the Future NSW Coal Fired Electricity Generation Industry Study, will provide the NSW Government with a technical and economic evaluation of future options for the role of coal in providing a secure, reliable and affordable form of electricity generation for NSW, whilst reducing its carbon emissions and maintaining economic growth in the state.

The Study has been developed in four stages:

  • Stage 1 establishes a comprehensive data baseline and examines two reference scenarios.
  • Stage 2 models and investigates several options and scenarios that NSW could put in place to test outcomes under a carbon constrained future.
  • Stage 3 will model Wholesale electricity pricing.
  • Stage 4 will deliver Computable General Equilibrium (CGE) modelling and analysis to consider the broader impact on the economy.

Stages 1 and 2 of the study were completed by Ernst & Young (EY) in 2016 and Stages 3 and 4 are currently underway. A final report detailing the study results will be presented to the Minister once all the stages have been completed.

For further information
Coal Innovation NSW