New South Wales flags additional firming tender as coal retirements loom

New South Wales is preparing an additional tender for firmed generation capacity to address the gap left by retiring coal-fired power plants and support improved integration of renewable energy.

To date, Australia’s most populous state has conducted six tenders for long-term energy service agreements (LTESAs) and renewable energy zone (REZ) access rights under its Electricity Infrastructure Roadmap.

On Wednesday, NSW Energy Minister Penny Sharpe said the state government has directed AusEnergy Services Limited (ASL), formerly the Australian Energy Market Operator (AEMO), to determine the size and scope of an additional firming tender. The move aims to address the forecast energy shortfall in 2033–34 identified in the newly released Energy Security Target Monitor (ESTM) report.

The report indicates an overall improvement in NSW’s reliability outlook compared with last year’s findings, largely due to renewable and storage projects delivered under the Electricity Infrastructure Roadmap. However, it also highlights a growing challenge associated with renewable energy lulls.

“The NSW government has been abundantly clear that our number one priority is to deliver secure, reliable and affordable electricity through a mix of renewable generation, storage and gas as ageing coal-fired power plants come offline,” Sharpe said in a statement.

“The historic battery rollout marks an exciting milestone, but we can’t rest on our laurels. The latest ESTM report shows that while we’ve made great progress, there is more we can do.

“That’s why we’re building a robust pipeline of projects to meet NSW’s future energy needs, mitigate potential delays, and ensure value for money, helping to ease cost-of-living pressures for electricity consumers.”

According to the government, the new tender will be in addition to Tender 7, which launched in October 2025 and is seeking 500 MW of firm capacity to meet reliability needs in 2027–28.

Earlier in February, the NSW government announced the results of Tender 6 for long-duration storage, awarding LTESAs to six lithium-ion battery energy storage projects representing 1.17 GW/11.98 GWh of capacity.

Subject to planning approvals, the largest of the six projects – with a nominal storage duration of 10.6 hours – is French developer Neoen Australia’s 330 MW/3,500 MWh Great Western Battery, located in Wallerawang near Lithgow, approximately 140 kilometres northwest of Sydney.