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Australia’s NSW eyes gas-fired power tender in 2027

  • Märkte: Electricity, Emissions, Natural gas
  • 13.10.26

Australia's New South Wales (NSW) government plans to launch a tender in early 2027 to support 1.5GW of mostly new gas-fired power capacity that would need to be on line by 31 May 2033 as more of the state's ageing coal-fired plants retire.

The tender would be open to different technologies but projects would need to demonstrate "net energy contribution" — or that they increase the total volume of electricity supplied to the system and do not rely on energy consumed from the grid to deliver the contracted capacity — which would exclude standalone batteries or pumped hydro. Projects would also need to be able to dispatch power when required and maintain supply over periods of at least eight hours.

Gas-fired plants would therefore be "well placed" to provide all three requirements and make a material contribution to addressing future reliability risks identified by tender operator AusEnergy Services (ASL), an arm of the Australian Energy Market Operator (Aemo), the firm said today.

"We expect most of that [1.5GW] will be through gas peaking," NSW energy minister Penny Sharpe said today at the Australian Financial Review (AFR) Energy and Climate Summit in Sydney.

Gas-fired power accounts for just around 2pc of NSW's annual electricity generation, a "small but very significant" part of the system, Sharpe said on 13 October.

The share could increase to around 3.9pc by 2050, according to Aemo's 2026 Integrated System Plan (ISP) "step change scenario".

NSW is forecast to face a power capacity shortfall of around 1.5GW from 2033-34 following the expected closure of the 2.71GW Bayswater and 1.36GW Vales Point coal-fired power plants.

Public consultation on tender design

Gas-fired projects have been allowed to bid in firming tenders in NSW under the state's long-term energy service agreement (LTESA) framework but have not been able to compete with batteries.

ASL opened a public consultation today on potential changes to the design of a firming LTESA tender to specifically support gas-fired plants.

It is asking feedback until 4 November on several points, including setting the default contract term to 20 years to provide long-term revenue certainty more closely aligned to the expected economic life of a gas-fired plant, as well as introducing a cost adjustment regime that takes into account currently "elevated" risks of significant price increases to procure gas turbines globally due to demand from data centres.

Strong bids in the future tender are also expected to include long-term gas procurement arrangements and fuel storage capability.

The NSW government had already flagged upcoming support to gas-fired power in its Future of Gas Statement released last week.

Gas projects are not allowed in the federal Capacity Investment Scheme (CIS), which was launched in 2024 to support the country's legislated 82pc renewable electricity target for 2030.

Some Australian utilities and market experts had been asking for support for gas-fired power in recent years, including from the federal government.

Aemo forecasts Australia will need 17GW of gas-powered generation by 2050 to support the future electricity grid, up from less than 13GW currently.

Australian utility and upstream operator Origin Energy last month disclosed plans to build a 1.2GW gas peaking power plant near Marulan in NSW that could begin operation in 2033, which might make it suitable for the tender.

Utility EnergyAustralia is planning an even larger gas plant in that same region, the 1.43GW Marulan facility, which could come on line in 2032.

ASL said it will decide closer to 2030 whether a contingent tender would be required.


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