The energy industry is hoping that renewable energy zones (REZs) will solve the country’s lingering grid connection problems, but some fear that the situation could get worse.
A survey of 36 renewable energy experts and industry participants around Australia found that almost three quarters hope REZs will streamline grid connection processes.
But a small handful say it’s just going to make things more complicated, doubting that transmission companies and REZ network operators will be able to work together with differing network requirements.
“Two out of five (39 per cent) believe it will improve the connection process by accelerating approvals,” the survey found.
“A third (33 per cent) say it will improve the connection process by improving role clarity and simplifying processes.”
The remaining 10 industry insiders were less enthusiastic, telling the survey, commissioned by NSW network operator Essential Energy’s non-regulated business Intium, that coordination between the REZ and non-REZ transmission companies will be complicated.
They also point out that limited capacity in REZs mean too much competition – as seen already when the South West REZ in New South Wales (NSW) only award access rights to four projects and radically scaled back three of them – and highlighted differing technical requirements and modelling as other complicating factors.
The REZs themselves are delaying factors, says Nexa Advisory CEO Stephanie Bashir.
“State jurisdictional access rights for REZs are onerous and caught up in red tape, and they are creating problems not just for renewable energy projects inside them, but for those outside too,” she told Renew Economy.
“While we’re working through how to make REZs work, we should still be providing open access to projects outside those zones to make sure we have enough generation when we need it.”
For example, Victoria’s new grid access rules effectively cancel out the current National Energy Market-wide open access regime, with VicGrid saying it’s creating challenges for developers in choosing where to invest and for communities through uncoordinated development.
Instead, projects that win access within the proposed zones receive a streamlined approvals process, whereas those outside the zones will have to jump through more hoops to prove they won’t impinge on the grid access of those within. VicGrid hopes to have the Victorian Access Regime in place by march next year.
Developers are saying grid connection delays can derail commercial operations and impact investor confidence, says Intium general manager Nathan Rhodes.
“The need to solve this challenge spans all asset classes central to the energy transition, whether it be utility-scale solar, wind farms, [batteries] or microgrids, which must efficiently connect to the grid to deliver energy at scale,” he said in a statement.
“This is a nationally important issue that, in our view, deserves greater attention and public discussion.”
A terror of grid connection delays harks back to a period five to seven years ago, when fears of last minute grid delays were a real fear as the Australian Energy Market Operator (AEMO) was struggling to match requests with grid stability.
In 2020, for example, Tilt Renewables was on the cusp of getting its 336 megawatt (MW) Dundonnell wind farm running.
It was built on time and on budget and full market participant registration, but the developer was surprised to be told the grid connection was delayed because of unspecified connection issues.
But today getting a grid connection is now more irksome than deal breaker – and AEMO isn’t even top of the list for delays now, just pipped by irritations with the time needed to get access and environmental approvals.
The survey shows today that fear for some in the industry has fallen away, as two thirds of respondents say the process to get a grid connection is now an efficient one.
However, three-quarter of those respondents, or 27 people, also said it took them two years or less to get through the process itself, a record sprint when measured again the timeframes seen by the industry as a whole.
In April, Open Electricity crunched AEMO connections pipeline data and found the median time from application to commissioning is three years.
The solution to such delays is more investment in grid upgrades and more transparency around how much capacity is available in particular parts of the grid, the survey found.
Also topping the wishlist were more streamlined regulatory processes and more technical cooperation between developers and network operators.
A network expert at heart, Bashir says the solution lies in building more transmission lines and doing it on time.
“I understand there are issues with building interconnectors because they are so large, but states need to be open to market-led transmission projects,” she says.
“Right now there are restrictions on where transmission should and shouldn’t go because they are protecting the REZs. We don’t have time for that, and the delays are costing consumers.”
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