Renewable Energy Zones
The NSW Government’s Electricity Strategy sets out a plan to deliver three Renewable Energy Zones (REZ) in the State’s Central-West Orana, New England and South-West regions. This builds on the NSW Transmission Infrastructure Strategy and supports the implementation of the Australian Energy Market Operator’s Integrated System Plan.
These REZs will play a vital role in delivering affordable energy generation to help prepare the State for the expected retirement of thermal power stations over the coming decades.
The REZ are expected to unlock a significant pipeline of large-scale renewable energy and storage projects, while supporting up to $23 billion of private sector investment in our regions and up to 2,000 construction jobs each year.
A REZ involves the coordinated development of new grid infrastructure in energy rich areas, efficiently connecting multiple generators in the same location. REZs are the modern-day equivalent of a power station, combining generation, transmission, storage and system strength services to ensure a secure, affordable and reliable energy system.
The NSW Government is setting up a new Government-controlled statutory authority to lead the delivery of NSW REZs.
The Energy Corporation of NSW will coordinate the development of transmission and generation in the REZ, working closely with Government, energy market bodies and industry. It will work directly with communities to maximise the flow of benefits to host regions and realise opportunities for regional development.
The Corporation will have a number of key functions, including:
- Leading community and stakeholder engagement
- Contributing to strategic planning for each REZ, including an optimal land use strategy
- Designing and implementing a commercial framework to support investment
- Administering an access framework for the REZ that delivers benefit to generators
- Administering a competitive process to coordinate generation in the REZ
- Coordinating technical design of the REZ in consultation with program partners and generators
- Promoting local development opportunities, engaging with local community and industry.
The REZ will play a vital role in delivering affordable energy to help replace the State’s existing power stations as they retire over the coming decades.
The zones are expected to deliver multiple benefits for NSW, including:
- improving electricity reliability by delivering significant amounts of new energy supply
- increasing affordability by reducing wholesale electricity costs
- supporting emissions reduction by delivering reductions in the electricity sector
- engaging communities by helping them to actively participate in the development of energy infrastructure in their region.
The NSW Government is in the feasibility and planning stage for the State’s first pilot REZ, which is set to be built in the Central-West Orana region. View an indicative location of the Central-West Orana REZ (CWO REZ).
It is expected that CWO REZ would unlock up to 3,000 megawatts (MW) of new generation by the mid-2020’s and be worth around $4.4 billion in private sector investment once fully developed. This is enough new generation capacity to power around 1.3 million homes. The CWO REZ is also expected to support 450 construction jobs in the local region.
The Central-West Orana region was chosen for the first pilot REZ because it benefits from relatively low build costs, a strong mix of energy resources, and significant existing investment and investor interest.
In June 2020, the NSW Government asked renewable energy, energy storage and emerging energy project proponents to register their interest in CWO REZ. The private sector brought forward 27,000 MW of new energy generation and storage projects, representing a total possible investment of $38 billion through the process. This is nine times the amount required to deliver the target 3,000 MW REZ.
In June 2020, the NSW Government also announced an additional investment of $31.6 million to support the development of the CWO REZ. This is on top of the $9 million announced in late 2019 and brings the projects total budget for the CWO REZ to over $40 million.
It will take a number of years to design, develop and build the CWO REZ. Construction is expected to begin in 2022, following extensive consultation with local communities.
The NSW Government is in the early stages of planning an 8,000 MW REZ located in the New England region. View an indicative location of the New England REZ (NE REZ).
New England has some of the best natural energy resources in the country, some of the State’s best potential sites for pumped-hydro development and strong investor interest.
The region is also close to the existing high voltage power lines that connect the NSW east coast and Queensland. This provides opportunities to increase NSW’s own energy resilience and to export excess energy to Queensland.
The NE REZ is expected to reduce energy bills for NSW consumers, generate around $12.7 billion in private sector investment and provide around 2,000 construction jobs for a decade and around 1,300 ongoing jobs.
The NSW Government has committed to investing $78.9 million to support development of the NE REZ. This is in addition to the $40 million already committed to delivering the CWO REZ.