However, the long-term viability of those licences could come under threat, with the opposition Labor party calling for NSW to go all-in for renewable energy, taking a more cautious line on CSG.
CSG, which has been a political and environmental football in NSW over the last few years, was given the all clear in chief scientist Mary O’Kane’s report last year, but CSG remained a hot-button issue at the last state election.
Now, Labor has decided that it no longer wants to support CSG extraction in the state, while the Liberal National coalition government that has spent almost $30 million buying back previously issued – and valid – licences says it will reset the way the industry is licensed and regulated.
The new regime will set strict access conditions and will only allow exploration in areas deemed appropriate, as opposed to the open slather approach of previous years, which saw the CSG sector rub elbows with a range of rural and agricultural industries now deemed inappropriate.
However Labor says CSG is yet to be proven safe, and energy spokesperson Adam Searle said the government should not proceed with new CSG licences until all of the chief scientist's recommendations about the industry have been implemented.
"The government's priority now should be growing renewable energy sources as an overall part of our energy mix as a matter of priority,” he said.
"The 20% by 2020 target is falling well short, it's only at about 11% now and it's actually slipped in the last year or so.
"So that should actually be the government's priority for action, not trying to reboot the CSG industry before it is ready to proceed."
Last year AGL switched on two major solar farms in NSW, and last month resources minister Anthony Roberts announced that eight NSW solar farm projects have been shortlisted for millions of dollars in funding from the Australian Renewable Energy Agency under its $100 million competitive funding round for large-scale solar installations.
The eight projects have a total capacity of 242 megawatts and are worth an estimated $500 million in investment for the state.
NSW is already home to Australia's largest solar plant in Nyngan (102MW) and two other solar farms in Broken Hill and Moree.
AGL’s decision to walk away from Gloucester last week, where flow rates were 20% below the level needed to be commercial, leaves Santos as effectively the last CSG company standing.
It wants to generate half of NSW’s gas from its Narrabri project in the Gunnedah Basin, but it is now copping the full force of Lock The Gate’s efforts to shut down all CSG in the Greater Artesian Basin.
NSW imports almost all of its gas from South Australia and Victoria, and while there have been dire warning of gas supply falling off a cliff, AGL’s decision to axe Gloucester and shut down its mature Camden CSG project in 2013 suggests that supply shortfall won’t be as bad as predicted.
AGL says it has contracts for gas sufficient to meet all its needs.
Gas prices have increased by 17% in recent years to $7-9 per gigajoule.
