NSW looks to quadruple size of first renewable energy zone after Eraring closure

The NSW government has unveiled a new corridor for major transmission lines that could help it quadruple the size of the Central-West Renewable Energy Zone, one of five being created to replace the coal generators that are rapidly exiting the market.

The news is significant, because NSW needs to fast-track the rollout of its REZs following the decision by Origin to close the biggest coal generator in the state, Eraring, seven years early, and moves by AGL bidders Mike Cannon-Brookes and Brookfield to do the same with Bayswater, the second biggest.

The Central-West Orana REZ is the first of five zones that will grant “access rights” to wind, solar and storage projects and act like individual power stations in a grid that – within a decade – could be powered almost entirely by renewables and storage.

An expressions of interest for the Central-West REZ last year found more than 27GW of potential renewable and storage capacity, nearly ten times more than the 3GW that was being sought.

Now, a proposed new transmission route that will divert the major towers and power lines away from rich agriculture zones and towards and across mining tenements could create capacity to deliver up to 11GW of renewables and storage in that zone.

“Renewable Energy Zones are modern day power stations that will revolutionise the way energy is generated and transmitted across the State,” Treasurer and energy minister Matt Kean said in a statement.

“The revised study corridor for new transmission infrastructure will minimise impacts on prime agricultural land in the region and enable us to deliver greater capacity for the Central-West Orana REZ to meet future energy needs.

“As the new route can accommodate additional transmission lines, it gives us options to deliver nearly four times the amount of renewable power to the grid with the same infrastructure.”

The NSW government has also released an updated report on proposed “energy hubs”, essentially transformer stations collecting the output of the nearby wind and solar farms and transforming them to a voltage suitable for the 500kV transmission lines.

The Central-West Orana RZ is not the only zone where NSW has been overwhelmed with excess capacity proposals. So far, the government has received around 135GW of proposals for four of the five REZs, including offshore wind projects.

But confirmation that coal generators are likely to close early than previously announced has forced the NSW government to accelerate its plans.

Liddell is closing in 2023, and now Origin plans to close Eraring in 2025, subject to worker and union approval, while Cannon-Brookes and Brookfield would close Bayswater as soon as they can, and EnergyAustralia has said Mt Piper could also be closed as soon as enough new capacity can be built.

NSW has already said it will provide $84 million to the key bodies involved in the renewables roadmap so they can bulk up and fast-track the process.

It will also create a new “Transmission Acceleration Facility”, and has set aside another $47.5 million to fast-track pumped hydro projects, which generally have a long lead time.

The revised transmission corridor, which shifts the eastern part of the line and its likely 70m high towers from the Merriwa Cassilis plateau to mining areas around Ulan, has the support of the local state MPs.

The member for the Upper Hunter, David Layzell, said the NSW Government has redesigned the eastern part of the corridor to avoid significant areas of high-quality agricultural land.

“The majority of the revised corridor is now located on land owned by mining companies or alongside existing transmission lines, minimising the impact on prime agricultural land,” Layzell said.

“This new route is a win for the Upper Hunter community and reflects the Government’s commitment to building new energy infrastructure in the right places.”

The minister for Western NSW and member for the Dubbo electorate Dugald Saunders said the Central-West Orana REZ will attract around $5.2 billion of private investment and support around 3,900 peak construction jobs and 500 ongoing jobs.

“This is about getting the balance right in a way that boosts the economic and employment benefits for local communities, without compromising the assets that make this region so unique,” Saunders said in a statement.

The newly formed Energy Corporation of NSW (EnergyCo) will lead a competitive process to appoint a network operator to design, build, finance and maintain the new transmission infrastructure in the REZ.

EnergyCo will undertake extensive community consultation and technical studies to refine the transmission alignment prior to lodging an Environmental Impact Statement for the project in early 2023.