NSW Renewable Energy Zones Offer Smart Strategy to Phase Off Coal

NSW Renewable Energy Zones (REZs) Offer Smart Strategy to Phase Off Coal - Northmore Gordon

The Australian government has finally committed to net-zero emissions by 2050. While this announcement is exciting, it will require considerable involvement from policy, finance, and engineering sectors to strategically coordinate the transition to a cleaner energy grid.  

And it will take input from all states to achieve this 2050 target.  

In New South Wales (NSW), there is extensive planning and development of renewable energy zones (REZs) — areas with high concentrations of clean, renewable energy. Developing these REZs with renewable energy generators, energy storage, and transmission capacity will provide NSW with the power to harness clean energy, reduce electric costs, and retire coal-fired power plants.  

The Central-West Orana REZ — The Pilot Program  

Formally declared on 5 November 2021, The Central-West Orana region was selected to be the first developed NSW REZ because of its proximity to the existent transmission network and for the area’s abundance of renewable energy resources. This pilot REZ is set to begin construction at the end of 2022 and is slated to deliver 3 GW of clean, renewable energy to the state’s electricity grid by mid-2020s.  

The state’s June 2020 Request of Interest (ROI) demonstrated incredible enthusiasm for the project, garnering 113 registrations of interest whose combined generation would contribute 27 GW of energy generation — nine times the amount designated for this REZ. This incredible interest incentivised the state to consider larger-scale projects for upcoming REZ in the state’s Energy Infrastructure Roadmap. 

The overflow of interest will allow NSW to be selective with its development, enabling the state to move forward with developers and plans that bring the greatest overall benefit to the region. It’s estimated that during peak development, the REZ will support 3,900 construction jobs — keeping those jobs local will boost the regional economy. In addition to job creation, a portion of the access fees paid by generating stations to guarantee connectivity to the transmission network will go directly to the local region and is estimated to bring $265 million to host communities by 2042.  

The Australian Energy Market Operator (AEMO) has deemed the Central-West Orana REZ an ‘actionable’ transmission project, which means it is critical to address cost, security, and reliability issues across the entire National Electricity Market. With solar and wind being the most economic forms of power generation across Australia, the Central-West Orana REZ offers significant opportunity for the state to wean off uncompetitive coal-fired plants and drive down utility costs.   

New England REZ — The Largest REZ in NSW 

With momentum spurring from the outstanding interest for the Central-West Orana REZ, NSW increased the scope for its New England REZ to generate an expected 8 GW of energy, making it the largest REZ in the NSW roadmap. 

Given the rich potential for pumped-hydro projects in the New England area, this REZ will likely incorporate pumped-hydro technology into its infrastructure buildout, although the project is not yet to the stage of detailing development plans.  

The size and scope of the New England REZ are expected to support 830 operational jobs and 1,250 construction jobs each year. When completed, it should sufficiently power 3.5 million homes and enhance the area’s energy resiliency by connecting to existing high-voltage power lines that connect NSW and Queensland and allow NSW to export surplus energy to the neighbouring state.   

Other REZs in the NSW Roadmap  

The Central-West Orana REZ and New England REZ combined make NSW the leading state in Australia for investment in renewable energy. On top of these two REZ locations, NSW also includes three other REZ sites in its Energy Infrastructure Roadmap:  

  1.  South-West REZ — Chosen for large availability of solar resources and proximity to transmission project EnergyConnect, this REZ is currently in the Request for Interest phase, which will be open until the end of November.  
  1. Hunter-Central Coast & Illawarra REZs — These are the final two proposed REZs in the NSW Energy Infrastructure Roadmap. As with the other three REZ sites, these will take a number of years to plan and develop, and this planning phase will heavily involve communication and feedback from stakeholders to assure development coincides with regional economic activity and local community values.  

Electricity in NSW is currently powered primarily by coal. That is set to change as coal-fired power plants are scheduled to retire in the upcoming decades. The first set to shut down operations is the Liddell plant in the Hunter Valley region, planned to be fully closed in 2023. Others are expected to close in following years.

This adds gravity to the situation of advancing NSW REZ development so that the state continues to have reliable energy as it phases out coal.  
 
In addition to providing energy security, REZ development can also help transition Australia towards other energy markets as global demand for its coal exports declines. 

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