The NSW Government has confirmed it will hold the minimum duration for Long-Term Energy Service Agreements (LTESAs) at eight hours while seeking 28 GWh of long-duration storage capacity by the end of 2033, up from the previous target of 16 GWh by 2030. These decisions come after consultation with industry stakeholders as part of efforts to enhance energy system reliability and support the transition to renewable energy.
Stakeholders had mixed views on the appropriate duration, but there was strong support for maintaining a fixed period in legislation to provide certainty for investors and developers.
Amendments to the Long-Term Energy Service Agreements framework will enhance the criteria for assessing tenders for LDS projects. These changes will require the Consumer Trustee to consider additional factors such as system resilience to energy shortfalls, the provision of system security services like inertia and system strength, and the potential to avoid or defer network investment through well-located storage projects.
Aggregated LDS assets, including community batteries and virtual power plants, have been acknowledged for their role in the energy transition. These assets will be eligible for participation in LTESAs under the existing legislative framework. While stakeholders supported the registration of aggregated assets in AEMO’s central dispatch system, current requirements may be overly burdensome for smaller-scale storage units. A proposed rule change by the Australian Energy Market Commission, expected by December 2024, could address this issue by introducing a “scheduled lite” registration process.
These updates aim to provide long-term certainty for the energy sector while enhancing the resilience and security of the NSW electricity network.