NSW doubles size of Australia’s first renewable energy zone, appoints operator

The NSW state government has confirmed it will boost the carrying capacity of the country’s first renewable energy zone and has also announced the consortium that will manage the REZ and carry the burden of any cost over-runs.

State energy minister Penny Sharpe on Wednesday confirmed a decision flagged in August to “supersize” the carrying capacity of the Central West Orana Zone to 6 GW, up from the original 3 GW, to ensure enough wind, solar and storage can be hosted to help fill the gap created by the exit of coal fired generators.

The initial network capacity of the transmission infrastructure is expected to be 4.5 GW, but this will be increased to 6 GW to allow more wind and solar farms to be connected in the mid to late 2030s.

The change will not alter the geographical size of the REZ, which covers an area of about 20,000 square kilometres around Dubbo.

Meanwhile, the state government has also confirmed that the a consortium known as “Acerez”, comprising Spain’s Acciona, Cobra and Endeavour Energy will be the operator of the REZ, and be responsible for building operating and maintaining the REZ transmission lines, energy hubs and other infrastructure.

The consortium had been named as the preferred bidder in April, despite the REZ being located within the normal network boundaries of Essential Energy, which was in a rival consortium.

The government says this is the first time it has competitively procured a new transmission network, with delay and cost overrun risks to be substantially borne by the Network Operator, rather than passing them straight to electricity consumers.

The government says the Central-West Orana REZ – the first of five planned for the state – will allow solar and wind to be connected to the grid “at a scale never seen before”, although it still has to compete regulatory and planning approvals, with financial close scheduled for the second half of 2024.

It says the environmental impact statement for the REZ was recently placed on public exhibition, and a response to submissions will be released early next year, ahead of state and Commonwealth planning approvals, expected in mid-2024.

If approved, construction is expected to start in early 2025, and initial operation will begin in 2027-2028, where it will support up to $10 billion in private investment in wind, solar and storage projects.

“These milestones are an important step forward in the development of the Central-West Orana REZ, taking it from vision to reality,” energy minister Penny Sharpe said.

“Regional communities are central to delivering our transition to renewables. Those that host new energy infrastructure will share in the benefits of the once-in-a-generation economic opportunity presented by the transition.