Four big wind, solar and battery projects have been granted access rights to the electricity grid in the crucial south-west renewable energy zone, in a major milestone for the energy transition that has produced some happy winners and many frustrated losers.
The NSW government on Wednesday announced that the four winners of the grid access rights include the widely tipped 1.45 GW Yanco Delta wind project owned by Origin Energy, and 832 MW of capacity awarded to the Pottinger wind and battery project owned by AGL and Someva Renewables.
The other winners include 1.01 GW of capacity awarded to the Dinawan wind, solar and battery project owned by Spark Renewables, and 283 MW awarded to the Bullawah wind project, owned by BayWa.
The results confirm that Windlab’s Junction Rivers project failed to gain access rights, despite being the only project located in the south west REZ to win an underwriting agreement in the first major auction under the federal government’s Capacity Investment Scheme.
The biggest talking point, however, might be the fact that only 3.56 GW of access rights capacity was awarded, despite 3.98 GW being originally available for allocation, and more than 19 GW of projects proposed in the tender.
The south-west zone – based around Hay and including Balranald and Buronga – is considered key for the renewables transition in NSW, because it is one of the first REZs in the state, is sparsely populated, has welcoming landowners and communities, and is on mostly flat land that presents fewer logistical challenges.
But the REZ as currently designed is able to support only a fraction of the wind and solar resources available, partly because of the now regretted choice to build Project EnergyConnect – the transmission line that will link South Australia and NSW and will form the backbone of the zone – with a 330kV line rather than 500kV.
The decision to allocate just 3.56 GW appears to confirm fears that the zone is able to absorb less capacity than first thought, particularly in the western end where the new transmission line may be more heavily congested.
Energy minister Penny Sharpe’s office confirmed as much in a later statement in response to questions from Renew Economy.
“The initial aggregate maximum capacity cap for the South West REZ access scheme is 3.98 gigawatts. However, EnergyCo was limited in the amount of generation capacity it could award through access rights due to limits on the amount of technical curtailment allowed in the REZ,” the statement said.
“In the South West REZ it was determined that 3.56 gigawatts was the maximum amount of generation capacity that could be awarded under this tender without breaching the target transmission curtailment level of the REZ. “
The two biggest project allocations – Yanco and Dinawan – are close to the new Dinawan hub which has stronger infrastructure. (See map below).
Some energy experts suggest that installing giant batteries that can act as “shock absorbers” – like the Victoria Big Battery and the new Waratah Super battery – may be needed to boost capacity from the zone. Others suggest stringing a second line along the route.
One energy insider suggested that the reason for the reduced capacity was the high capacity factors of the wind projects there – more than had been expected. So, while the project capacity is lower than thought, the actual generation might be higher.
It appears that only Origin’s Yanco Delta project received an allocation representing the full capacity of its project. All others had – or may still have – ambitions for much larger projects at their sites (Dinawan 2.3 GW, Pottinger 1.3 GW and Bullawah 1 GW), but only had smaller allocations.
The projects will provide a total of 700 MW of battery capacity and 2,800 MWh of storage. The Pottinger project includes a 400 MW, 1600 MWh battery, located at the same connection point.
The Dinawan project features three separate connection points – two wind only (350 MW and 357 MW), and one 300 MW connection combining solar and battery storage. All told, it will comprise 707 MW of wind, 300 MW of solar and a 300 MW, 1200 MWh battery.
The access rights for the south west REZ are the first to be allocated for at least five renewable energy zones created to help ensure enough generation and storage capacity is built to allow the retirement of the state’s fleet of ageing coal fired power generators over the next decade.
“The South West Renewable Energy Zone is expected to drive more than $17 billion in private investment in solar, wind and energy storage projects, and this landmark tender shows the high interest in investing in NSW,” Sharpe said in an earlier statement.
“These projects will help ensure NSW has enough renewable energy generation and storage when coal-fired power stations retire. They also give certainty to host-communities, who will directly benefit from the fees paid by these companies to connect to the REZ.”
The winners were advised of their initial selection by AEMO Services, which conducted the tender last year. However, the winning projects had to be ratified by EnergyCo, the state authority that is co-ordinating the rollout of the REZs, but delays led to speculation of forced changes, including a reassessment of the available capacity.
“We had strong interest from industry in the South West Renewable Energy Zone access rights tender,” EnergyCo CEO hannah McCaughey said.
“The access scheme will also ensure we make the best use of new power lines, to put downward pressure on energy bills for everyone in NSW.
“The first projects are expected to come online from 2027 to 2030, which will help keep the lights on and secure our energy future.”
The results mean that other project developers in the zone will have to either abandon their plans, or seek an alternative connection option, possibly through the existing local network.
The REZs are largely being supported by new transmission infrastructure, but the many cost overruns and delays have caused some to have a rethink, and the owners of local networks insist they have available capacity in the tens of gigawatts that could be connected faster, and at a lower cost.
Some renewable energy developers are already looking at the opportunities in the regions, deliberately avoiding the REZ process because of the scale of competition and the risk of missing out.
The fate of the $1.4 billion Junction Rivers project – which aimed to combine a 600 megawatt wind farm with a 200 MW, 800 MWh big battery, about 15kms south of Balranald, is now unclear as one of the conditions of its CIS win was that it has access to the grid.
See also: Origin’s grid access win triggers another $175m payment for giant wind project
And also: Renew Economy’s Big Battery Storage Map of Australia
