Memorandum of understanding

The NSW and Commonwealth governments are jointly funding over $2 billion in energy and emissions reduction initiatives, while also ensuring NSW has a reliable and affordable energy system.

A new memorandum of understanding (MOU) sets out a clear, long-term path to help the state meet its target of net zero emissions by 2050. The MOU will see reduced emissions across key sectors, including agriculture, mining and transport. 

As well as reducing emissions, the initiatives set out in the MOU improve the affordability and reliability of the NSW electricity system, benefiting households, businesses and communities.

Key initiatives in the MOU include:

  • improving transmission interconnection and network access, including accelerating and delivering:
    • NSW’s first Renewable Energy Zone 
    • the HumeLink project to unlock existing and future generation from Snowy Hydro  
    • upgrades to the Queensland to NSW interconnector
  • keeping existing electricity generation plants available and reliable until they close
  • setting a target to inject an additional 70 petajoules of gas per year into the NSW market, and agreeing to a gas market review if this target is not met by 2022
  • ensuring emissions reduction in the electricity sector stays on track
  • committing to invest $2 billion in reducing emissions in NSW
  • supporting new generation investment in NSW.

Around $2 billion of the MOU supports initiatives that reduce emissions in non-electricity sectors. These include:

  • $450 million from the Commonwealth’s Climate Solutions Fund to NSW based projects that support businesses, farmers and land managers to take practical, low cost abatement actions
  • a $450 million Emissions Intensity Reduction Program to support large NSW-based sources of emissions to transition their plant, equipment and other assets to low emissions alternatives
  • a Clean Technology Program to research, develop and commercialise emissions reduction technologies and establish a clean technology hub in NSW
  • a Hydrogen Technology Program to support the commercialisation of hydrogen technologies in NSW, including recommendations arising from the National Hydrogen Strategy
  • an Electric Vehicle Infrastructure and Model Availability Program to fund a reverse auction for electric vehicle fast charging stations and private fleet procurement by 2024
  • an Energy Efficiency Program to support initiatives that reduce electricity bills, ease pressure on the electricity grid and reduce emissions
  • a Coal Innovation Program to commercialise and deploy technologies to reduce emissions from the extraction, preparation and use of coal
  • a Primary Industries Productivity and Abatement Program to support primary producers and landowners in regional NSW to commercialise low emissions technologies and maximise revenue from carbon offset programs.  

Download the Memorandum of Understanding.