NSW Public Transport to Run on 100% Renewable Energy from 2027 in $1.9bn Deal
The Minns government in New South Wales has announced a landmark $1.9 billion contract with Snowy Energy, ensuring that all electric buses, trains, and light rail services in the state will operate on fully renewable energy starting from July 2027. This seven-year agreement, which will last until 2034, marks the first time that public transport operations across NSW have been consolidated under a single renewable energy framework.
Cost Savings and Environmental Benefits
NSW Minister for Transport, John Graham, emphasised that the deal will reduce costs at a time when fuel uncertainty is prompting more Australians to opt for public transport over driving. "Cost of living pressures are real for household and government budgets," Graham stated. "This contract reduces costs and moves us towards better environmental outcomes while we deliver a reliable public transport network." The government projects savings of $130 million on transport power bills, which will be reinvested into enhancing services.
How the Renewable Energy Deal Works
Snowy Energy, the retail brand of the Commonwealth-owned Snowy Hydro, secured the contract after a competitive two-year process. Prior to this agreement, Transport for NSW was already Snowy Energy's largest customer, accounting for over 10% of its energy sales. Snowy Hydro CEO, Dennis Barnes, explained that the deal matches public transport's energy consumption with wind, solar, and hydroelectric generators through renewable energy certificates. "What this deal does is match the consumption of Transport for NSW to the production of renewable energy somewhere, but it isn't a physical connection. It's a financially traceable connection through certificates," Barnes said. Future energy sources will include assets like the Snowy Uungala wind farm, currently under construction near Dubbo.
Significant Emissions Reductions
The state government has highlighted that this agreement will lead to substantial emissions reductions, avoiding more than 800,000 tonnes of CO2 annually compared to conventional power sources. Transport for NSW, which consumes nearly as much electricity as all other NSW public agencies combined, has set ambitious targets to reduce operational emissions by 65% by 2030 and achieve net zero by 2035.
Current State of Public Transport and Future Plans
Currently, fossil fuels are still prevalent in most of the state's public buses, as well as on diesel-powered ferries and intercity and regional trains. The new regional rail fleet, designed to be bimodal and run on both diesel and electricity, is several years behind schedule in replacing the diesel-powered XPT trains. However, the government has committed to fully replacing diesel-powered ferries with electric vessels by 2035. Additionally, over 500 electric buses have been ordered, with hundreds already in operation, and plans are in place to replace the entire fleet of 8,000 diesel-powered buses with 7,500 electric buses.
Challenges and Oversight
Last month, the NSW Anti-Slavery Commissioner raised concerns that Transport for NSW had not taken adequate steps to address potential forced labour issues in the supply chains for lithium-ion batteries, particularly from Xinjiang in China and the Democratic Republic of Congo. This highlights ongoing challenges in ensuring ethical sourcing as the state transitions to renewable energy.
