Construction begins on coal country renewable energy zone, state’s first to upgrade existing network

Construction has started on the Hunter-Central Coast renewable energy zone (REZ), a project that is set to add a gigawatt of hosting capacity to the New South Wales (NSW) grid through new and upgraded network infrastructure.

The REZ, the simplest of those currently planned, will enable enough electricity to power more than all the homes in the Hunter region, the state government says. 

The Hunter-Central Coast REZ was declared in late 2022 and two years later, Ausgrid was picked to build it. 

Ausgrid was given a waiver in October which meant it didn’t have to keep its REZ and existing network services separate, and signed the final contract with EnergyCo in December.

The REZ network infrastructure will connect 1.8 gigawatts (GW) of new renewable generation and storage projects.

“Upgrading this critical infrastructure is another step forward in securing clean, affordable and reliable energy for households and businesses as ageing coal-fired power stations retire,” said NSW energy minister Penny Sharpe in a statement, following a visit to the Kurri Kurri substation.

“The renewable energy sector directories open another door for local businesses to participate in the growing pipeline of energy projects across the state.”

Unlike other REZs which are being built from scratch, Ausgrid will upgrade and add to existing infrastructure that it already owns in the Hunter-Cental Coast zone.

The work involves upgrading about 85km of sub-transmission lines, installing 18km of new underground fibre optic communications cable, building two new energy hubs near Muswellbrook, and upgrading existing substations.

“As Australia’s first Distribution REZ, Ausgrid is proud to lead the way in demonstrating how we can play a key role in the energy transition,” said Ausgrid board chair Helen Nugent in a statement.  

“I’m incredibly proud of the work Ausgrid has done over the past 12 months to plan this project – and importantly to carry out extensive engagement with landowners, residents and local businesses.

The Hunter-Central Coast REZ is expected to bring up to $3.9 billion in private investment, some 590 jobs during construction, and 220 ongoing operational jobs from 2030.

EnergyCo CEO Hannah McCaughey says 90 per cent of these jobs will be filled by people from the Hunter region. 

The Hunter-Central Coast REZ is by far the smallest but as it’s being built around an existing energy zone, it’s also the easiest. 

Inside the zone are three operating coal power stations, with Origin Energy supposed to close the 2.9 GW Eraring power station by 2029 and AGL the 2.7 GW Bayswater power station by 2033, three that have already been closed.

These will open up additional capacity on the REZ infrastructure for renewables when they close.