“It’s now official, NSW does not need any baseload generation for at least 10 years” … opposition energy spokesman, Luke Foley. Photo: Janie Barrett

NSW will not need a new power generator for another 10 years, says a report that has raised questions about the government’s decision to sell the state’s generators to avoid the need to spend billions of dollars on boosting future supply.

A report commissioned by the Labor government in 2007 predicted NSW would need a new generator by 2014 to avoid blackouts, prompting Labor’s decision to privatise power generation.

The O’Farrell government has continued to argue NSW would need to spend $6 billion to $7 billion on new baseload power generation unless state-owned generators were privatised.

The opposition energy spokesman, Luke Foley, said forecasts for energy supply needs had fallen in the past four years for a range of reasons, including the global financial crisis, a decrease in energy use due to higher bills, and an increased uptake of solar energy.

The Australian Energy Market Operator released a report last week that says NSW does not need to increase its power supply until 2022.

”It’s now official, NSW does not need any new baseload generation for at least 10 years,” Mr Foley said. ”Mr O’Farrell’s argument that more than $6 billion needs to be spent on new baseload has been blown out of the water. That argument for privatisation of generation no longer exists.”

However, the Treasurer, Mike Baird, yesterday stood by what he said in late May, when Parliament passed legislation to allow the state’s power generators to be sold. He maintains the privatisation will avoid the need for the government to invest more than $6 billion on future baseload generation and that the money would be better spent on much-needed infrastructure.

Mr Baird said yesterday that forecasts of demand for electricity supply had fallen as a result of the global financial crisis and price increases, to which the federal government’s carbon tax would also contribute. But while it was impossible to know whether the economy would improve during the next five years, planning could not be postponed.

He said it was ”rubbish” to suggest the government did not need to start planning for electricity needs for another 10 years.

”It takes four to six years to get a generator up and running,” he said. ”We can’t wait for the supply and demand intersection to occur before we start planning.

”The forecast is there will be a supply and demand mismatch just after 2020. A prudent manager wouldn’t wait for the mismatch; they would ensure a buffer before it eventuated.

”The government’s view remains that outlay is best left to the private sector.”