The New South Wales and Federal governments have struck a $2 billion deal to increase gas and renewable energy supply.

Under the new deal, NSW will increase its gas production and imports in exchange for $960 million of federal funding, used to upgrade the grid and invest in renewables.

The government is adamant the new deal will bring down energy prices but have given no indication as to how much by.

“Can you guarantee it’ll lower prices?” Ben Fordham quizzed Energy Minister Angus Taylor.

“Well, look, it’s 70 petajoules of gas in a market of 120, so this is a massive increase in gas, and more supply pushes down prices Ben.”

One of the agreement’s conditions is for the state to supply coal to the Mount Piper Power Station until 2042.

Mr Taylor says the “relatively new” power station has been undersupplied, leaving Victoria and NSW struggling in the hot weather.

“It hasn’t had enough coal to be able to run flat-out, and on days like today when we need every bit of power we can get … it’s a big problem.”

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The state will increase both its domestic production and international imports, but the opposition argues there’s no need to increase production of gas in NSW.

Shadow Energy and Climate Change Minister Adam Searle says domestic access to what’s already being produced needs to be improved.

“The fact is, Australia already produces far more gas than it needs. The problem is, most of that gas is being sold overseas.”

Image: Sami Sarkis/Getty