NSW embarks on privatisation programme

9 July 2008


The government of the Australian state of New South Wales is embarking on an electricity sector privatisation programme in a bid to secure investment in the industry.

The programme is to start later this year with the sale of Energy Australia’s retail operations and will culminate in a public share offering of a newly integrated electricity business comprising Eraring Energy, one of the state's largest producers, and the retail activities of Integral Energy in late 2009.

New South Wales is the last Australian state to initiate the large-scale privatisation of its power sector. The process is expected to net the government around A$10 billion, and is designed to secure new baseload generating capacity in the state.

“The government’s electricity transaction strategy provides the right settings for the private sector to make the necessary investment in the State’s future energy needs while maximising the benefits for taxpayers,” said NSW Treasurer Michael Costa.

Other assets included in the privatisation programme include the retail arm of Country Energy and the long-term lease of the Macquarie Generation and Delta Electricity generation assets. Details of the plan are to be reviewed by the state’s Auditor General, while an analysis of the effects of the strategy on competition will be sent to the Australian Competition and Consumer Commission.

Energy consumption in NSW is forecast to increase to 91 000 GWh a year by 2013-14, an increase of 10 500GWh from 2006-07. The state has implemented a range of energy efficiency plans and expects renewables to provide 1500 GWh of energy.

New gas or coal fired power plants will be required to meet the remaining 9000 GWh of increased demand.




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